The United States released its crude oil reserves and the oil price fluctuated and fell
The conflict between Russia and Ukraine continued this week. Under the background of geopolitical conflict, the United States announced the large-scale release of crude oil reserves, which alleviated the market’s concern about supply to a certain extent, and the international oil price fluctuated downward. As of April 1, Brent and WTI crude oil futures prices closed at US $104.39/barrel and US $99.27/barrel respectively, and the US dollar index closed near 98.6.
The number of oil drilling rigs in the United States increased and crude oil inventories decreased by 3.45 million barrels
This week, the number of active oil drilling in the United States increased by 2 to 533, and the total number of oil and gas drilling rigs increased by 3 to 673. US crude oil inventories reached 410 million barrels, down 3.45 million barrels from the previous week; The total gasoline inventory in the United States was 238.8 million barrels, an increase of 780000 barrels over the previous week; Distillate oil inventory was 113.5 million barrels, an increase of 1.4 million barrels over the previous week.
In February 2022, OPEC output increased by 440000 barrels per day to 28.473 million barrels per day compared with the previous month
OPEC output increased in February 2022, with Saudi Arabia’s output of 10.193 million barrels / day, an increase of 141000 barrels / day over the previous month; Iraq’s output was 4.268 million barrels per day, an increase of 36000 barrels per day over the previous month; Iran’s output was 2.546 million barrels per day, an increase of 44000 barrels per day over the previous month; Venezuela’s output was 680000 barrels per day, an increase of 21000 barrels per day over the previous month; Libya’s output was 1107000 barrels per day, an increase of 105000 barrels per day over the previous month. This week, the prices of ethylene and butadiene rose, the prices of naphtha, propylene and pure benzene fell, and the price difference of naphtha, PDH and MTO rose.
The United States announced the release of 180 million barrels of crude oil reserves, and OPEC + insisted on increasing production steadily
The conflict between Russia and Ukraine continued this week, but the easing of supply side concerns led to the decline of oil prices. On the supply side, this week, the United States announced the release of emergency crude oil stocks, which will release 1 million barrels of strategic oil reserves every day in the next six months, with a total of 180 million tons. IEA Member States will also join the ranks of releasing crude oil reserves. On Friday, they agreed to release a new round of emergency fuel reserves. The release of oil stocks by western countries will help maintain the balance of the crude oil market in the medium and short term; However, the structural problems of crude oil production have yet to be repaired. This week’s OPEC + meeting announced a plan to maintain a steady increase in production, with an increase of 432000 barrels per day in May. According to the survey data of Bloomberg, OPEC increased production by only 90000 barrels per day in March, far below the increase quota of about 250000 barrels per day. On the whole, Russian crude oil may withdraw from the market, and it will take some time for Iranian crude oil to return to the market. OPEC member states led by Saudi Arabia still lack the willingness and ability to increase production. American shale oil is subject to insufficient investment and high cost, it is difficult to increase production, global crude oil capital expenditure is insufficient, and the tense situation of medium and long-term crude oil supply side will be maintained. On the demand side, OPEC released a report raising the global crude oil demand growth forecast in 2022 by 50000 barrels / day to 4.2 million barrels / day. The total crude oil inventory in the United States fell for 12 consecutive weeks, which also showed the strong growth of demand. A new variant of covid-19 virus Xe was found in the UK this week. The World Health Organization calls it the most infectious covid-19 variant. The spread of this variant and its impact on the global economy and crude oil market remain to be seen. In the follow-up, we will focus on the conflict situation between Russia and Ukraine, the sanctions policies of Europe and the United States against Russia, the progress of the negotiation of the Iranian nuclear agreement, the implementation of OPEC + production increase, the spread situation of Xe strain, the progress of vaccination and the development of covid-19 specific drugs.
Investment suggestion: due to the tense geopolitical situation and tight global crude oil supply and demand pattern, we expect the oil price to remain high and continue to be firmly optimistic about the prosperity of the petrochemical sector. It is suggested to pay attention to the following subscripts: first, the upstream sector, PetroChina, Sinopec, CNOOC, Enn Natural Gas Co.Ltd(600803) , Zhongman Petroleum And Natural Gas Group Corp.Ltd(603619) ; Second, oil service sector, China Oilfield Services Limited(601808) , Offshore Oil Engineering Co.Ltd(600583) , Cnooc Energy Technology & Services Limited(600968) , Sinopec Oilfield Service Corporation(600871) , Bomesc Offshore Engineering Company Limited(603727) ; Third, large private refining and chemical sector, Hengli Petrochemical Co.Ltd(600346) , Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Hengyi Petrochemical Co.Ltd(000703) , Tongkun Group Co.Ltd(601233) ; Fourth, light hydrocarbon cracking sector, satellite chemistry and Oriental Energy Co.Ltd(002221) ; Fifth, coal to olefin, Ningxia Baofeng Energy Group Co.Ltd(600989) ; The sixth and third largest chemical white horse, Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) and Jiangsu Yangnong Chemical Co.Ltd(600486) .
Risk analysis: geopolitical risk, Xe strain spread, OPEC + production growth is too fast.
