Protests against the prime minister took place in Libya. Sharara, the largest oilfield with a daily output of 300000 barrels / day, and elfeel oilfield with a daily output of 65000 barrels / day were forced to stop production, and two Libyan ports were forced to stop loading oil. We believe that Libya’s crude oil production capacity will be 1.2 million barrels per day in 2022. According to the opec4 monthly report, Libya’s output in March will be 1.07 million barrels per day and the remaining capacity will be 130000 barrels per day. Its further production capacity is limited. Although the Libyan unity government said last week that it had increased production to 1.4 million barrels per day through plans to develop the oil sector, the conflict has further exacerbated supply uncertainty.
China’s crude oil output in March was 17.71 million tons, a year-on-year increase of 3.9%, but the crude oil processing volume from January to march was 171.44 million tons, a year-on-year decrease of 1.5%. We believe that, on the one hand, China’s seven-year action plan to increase reserves and production continues to advance to provide guarantee for energy security. On the other hand, affected by the epidemic, China’s crude oil demand has declined. According to iea4 monthly report, IEA predicts that China’s crude oil demand increment in the second quarter of 2022 is predicted to be 15.4 million barrels / day, up from 16 million barrels / day, down Shanghai Pudong Development Bank Co.Ltd(600000) barrels / day.
The production capacity cycle has triggered great energy inflation, and we continue to be optimistic about the historic allocation opportunities of energy resources such as crude oil. We believe that whether it is traditional oil and gas resources or American shale oil, capital expenditure is the main reason for limiting crude oil production. Considering that the global capital expenditure on crude oil is insufficient for a long time, the elasticity of global crude oil supply will decline. In the transformation of old and new energy sources, the demand for crude oil is still growing, and the world will face the problem of crude oil shortage for many years. The international oil price will usher in an upward turning point in 2022. In the medium and long term, the oil price will remain high for a long time, and the energy resources are expected to be in an upward cycle in the next 3-5 years. We will continue to be firmly optimistic about this round of energy inflation, Continue to be firmly optimistic about the historic allocation opportunities of energy resources such as crude oil under the capacity cycle.
Risk factors: the risk of re spread of covid-19 epidemic in the world; New energy sources increase the risk of replacing traditional oil demand; Risk of OPEC + alliance modifying production plan; The risk that OPEC + oil producing countries have insufficient production capacity and the production rate is lower than expected; The United States lifted sanctions against Iran, and the risk of Iran’s crude oil returning to the market quickly; The risk of US policy adjustment on shale oil production, environmental protection and financing; Risk of global 2050 net zero emission policy adjustment.
