Crude oil supply tightened, and the international oil price exceeded US $80 / barrel
This week, due to the volatile situation in Kazakhstan, the country’s crude oil supply of about 1.6 million barrels / day was affected. In addition, Libya reduced production by 500000 barrels / day due to pipeline maintenance and oilfield shutdown. The crude oil supply tightened, and the international oil price exceeded the $80 / barrel mark. As of January 7, Brent and WTI crude oil futures prices closed at US $81.75/barrel and US $78.90/barrel respectively. The US dollar index closed near 95.7.
The number of oil drilling rigs in the United States increased, and the crude oil inventory decreased by 2.14 million barrels
This week, the number of active oil drilling wells in the United States increased by one to 481, and the total number of oil and gas drilling rigs increased by two to 588. U.S. crude oil inventory was 419.9 million barrels, down 2.14 million barrels from the previous week; The total gasoline inventory in the United States was 232.8 million barrels, an increase of 10.13 million barrels over the previous week; Distillate oil inventory was 126.8 million barrels, an increase of 4.42 million barrels over the previous week.
OPEC production increased in November 2021, increasing by 285000 barrels / day to 27.717 million barrels / day compared with the previous month
OPEC output increased in November 2021, with Saudi Arabia’s output of 9.867 million barrels / day, an increase of 101000 barrels / day over the previous month; Iraq’s output was 4.24 million barrels per day, an increase of 91000 barrels per day over the previous month; Iran’s output was 2.474 million barrels per day, a decrease of 9000 barrels per day over the previous month; Venezuela’s output was 625000 barrels / day, an increase of 15000 barrels / day over the previous month; Libya’s output was 1.14 million barrels per day, a decrease of 15000 barrels per day compared with the previous month. This week, naphtha and butadiene prices fell, ethylene prices were the same as last week, and propylene and pure benzene prices rose. Naphtha and PDH spreads rose while MTO spreads fell.
As the uncertainty of crude oil supply increases, it may be difficult for OPEC + to complete the 400000 B / D production increase plan
This week, due to geopolitical and other factors, the uncertainty of crude oil supply increased, and the crude oil demand is still not optimistic affected by Omicron, but the crude oil supply has been tightened greatly, and the international oil price has risen sharply. On the supply side, the OPEC + meeting in January decided to maintain the production increase plan of 400000 barrels / day in February, but the supply of OPEC + member countries is limited, and OPEC + may be difficult to complete the production increase plan: 1) Gazprom has no idle capacity at present, it is necessary to increase the drilling speed to increase production, and Russia’s raw oil supply may face the upper capacity limit; 2) Libya’s production decreased by 500000 barrels / day due to pipeline maintenance and oilfield shutdown. In addition, affected by geopolitical factors, unrest occurred in Kazakhstan, resulting in uncertainty in the country’s crude oil supply of about 1.6 million barrels / day. Geopolitics superimposed maintenance and other factors, and crude oil supply tightened significantly. On the demand side, the Omicron strain spread rapidly. On January 4, the number of daily cases in the United States reached 1.04 million, the highest since the epidemic. Affected by the epidemic, US gasoline inventories increased by more than 10 million barrels, and crude oil demand is still not optimistic affected by the epidemic. Overall, the pattern of crude oil supply and demand has improved significantly, and the international oil price has risen sharply. In addition, on January 7, the people’s daily issued a document “the rice bowl of energy must be in your own hands – on promoting China’s high-quality energy development in the new era”, which once again stressed the importance of energy security to China, strengthened China’s energy production guarantee capacity, accelerated the development and application of advanced exploitation technologies for oil and gas and other resources, and the prosperity of the oil and gas sector may continue. In the follow-up, we will continue to focus on the development trend of Omicron strain, the progress of covid-19 specific drug R & D and vaccination, the implementation of OPEC + production increase plan, the progress of Iran nuclear agreement negotiation, etc.
Investment suggestions: we expect that the overall pattern of crude oil supply and demand will be good in the future. China will continue to enhance China’s energy production guarantee capacity and accelerate the development and application of advanced exploitation technologies for oil and gas resources. Therefore, we continue to be optimistic about the prosperity of the oil and gas sector. It is suggested to pay attention to the following subscripts: first, the upstream sector, PetroChina, Sinopec, CNOOC, Enn Natural Gas Co.Ltd(600803) ; Second, oil service plate, 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 plate, satellite chemistry and Oriental Energy Co.Ltd(002221) ; Fifth, coal to olefins, Ningxia Baofeng Energy Group Co.Ltd(600989) ; The sixth and third largest chemical white horses, Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) and Jiangsu Yangnong Chemical Co.Ltd(600486) .
Risk analysis: geopolitical risk, the spread of Omicron strain, and the output growth of the United States is too fast.
