Supply concerns rose again and oil prices rose
The conflict between Russia and Ukraine continued this week. The IEA lowered its forecast for the growth of crude oil demand in 22 years, but the tight supply and the possible EU sanctions on Russian crude oil continued the market’s concern about supply, and the international oil price rose. As of April 15, Brent and WTI crude oil futures prices closed at US $111.70/barrel and US $106.95/barrel respectively, and the US dollar index closed near 100.5.
The number of oil drilling rigs in the United States increased, and the crude oil inventory increased by 9.38 million barrels
This week, the number of active oil drilling in the United States increased by 2 to 548, and the total number of oil and gas drilling rigs increased by 4 to 693. The US crude oil inventory was 421.8 million barrels, an increase of 9.38 million barrels over the previous week; The total gasoline inventory in the United States was 233.1 million barrels, a decrease of 3.65 million barrels compared with the previous week; Distillate oil inventory was 114.4 million barrels, down 2.9 million barrels from the previous week.
OPEC output increased in March 2022, up 57000 barrels / day from the previous month to 28.557 million barrels / day
OPEC output increased in March 2022, with Saudi Arabia’s output of 10.262 million barrels / day, an increase of 54000 barrels / day over the previous month; Iraq’s output was 4.309 million barrels per day, an increase of 11000 barrels per day over the previous month; Iran’s output was 2.546 million barrels per day, an increase of 7000 barrels per day over the previous month; Venezuela’s output was 697000 barrels per day, an increase of 8000 barrels per day over the previous month; Libya’s output was 1074000 barrels per day, down 37000 barrels per day from the previous month.
This week, the price of naphtha rose, the price of ethylene, propylene, butadiene and pure benzene fell, and the price difference of naphtha, PDH and MTO fell.
IEA lowered its forecast for 22-year crude oil demand growth, and crude oil supply and demand remained tight
The conflict between Russia and Ukraine continued this week, and the supply and demand of crude oil remained tense against the background of both supply and demand. On the demand side, the IEA released a monthly report this week, which lowered the growth expectation of global crude oil demand in 22 years. Due to the surge of covid-19 cases in China and the weaker than expected demand of OECD countries at the beginning of the year, the IEA expects the average crude oil demand in 2022 to be 99.4 million barrels / day, an increase of 1.9 million barrels / day over 2021 and a decrease of 260000 barrels / day compared with the last forecast; In March, the total inventory of OECD increased by 8.8 million barrels to 2.62 billion barrels, the first increase in 14 months, reflecting the downturn in demand. On the supply side, this week, the IEA lowered its forecast for the reduction of Russian crude oil supply. It is expected that the Russian oil supply will decline by 1.5 million barrels / day in April and about 3 million barrels / day from May. The decline in Russian oil supply in April is predicted to be halved compared with the last time; This week, the New York Times said that Europe is drafting a plan to sanction Russian crude oil. On the whole, the risk of Russian crude oil exiting the market still exists; OPEC output grew slowly. In March, OPEC only increased production by 57000 barrels per day, far lower than the increase quota of 250000 barrels per day; High inflation in the United States affected oil production. The U.S. government temporarily lifted the seasonal sales restrictions on ethanol gasoline. The EIA lowered the U.S. crude oil production to 820000 barrels / day in 2022, down 30000 barrels / day from the last forecast. On the whole, the decline of crude oil demand is less than that of supply. IEA member states can not fundamentally stabilize the supply side risk, and crude oil supply and demand remain tight. 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 Omicron virus 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, the spread of Omicron strain, and the rapid growth of OPEC + production.
