Crude oil, coal, natural gas and other energy prices continued to fall
Crude oil. As of January 19, the closing price of IPE oil distribution was USD 87.72/barrel, up 21.7% month on month and 11.2% year to date; WTI crude oil closed at US $86.17/barrel, up 25.5% month on month and 13.9% year to date. The slow recovery of global oil supply and geopolitical conflicts have led to the continuous rise of international oil prices in the near future.
In terms of natural gas, as of January 19, the price of IPE natural gas was 176.00 pence / Semm, down 52.9% month on month, down 19.2% year to date, and the price of NYMEX natural gas was US $4.02/mmbtu, up 4.7% month on month and 13.4% year to date. Higher than expected temperatures in Europe and the United States, Australia and other countries began to ship more liquefied natural gas to Europe, pushing IPE natural gas prices down sharply.
In terms of coal, as of January 19, China Shipbuilding Industry Group Power Co.Ltd(600482) coal futures closed at 774.80 yuan / ton, up 4.6% month on month and 5.0% year to date; The market price of q5500 thermal coal in Qinhuangdao port was 960.00 yuan / ton, down 11.1% month on month and up 21.5% year to date. The arrival of winter consumption season, coupled with Indonesia’s suspension of coal exports and other factors, pushed coal prices back up.
The growth rate of investment in the mining industry stabilized and rebounded, and the output of oil, gas and coal continued to grow
In terms of investment, the completed investment in fixed assets of China’s oil and gas exploration industry increased by 4.2% in December, and the growth rate changed from negative to positive. The completed investment in fixed assets of coal mining and beneficiation industry increased by 11.1%, and the growth rate further rebounded. The completed investment in fixed assets in the mining industry increased by 10.9%, and the growth rate continued to pick up.
In terms of output, in December 2021, China’s natural crude oil output was 16.47 million tons, a year-on-year increase of 1.7%; The output of natural gas was 19.2 billion cubic meters, a year-on-year increase of 2.3%; The output of raw coal was 371 million tons, a year-on-year increase of 4.60%. From January to December 2021, China’s cumulative crude oil output was 199 million tons, a year-on-year increase of 2.4%; The cumulative output of natural gas was 205.300 billion cubic meters, a year-on-year increase of 8.2%; The cumulative output of raw coal was 4.071 billion tons, a year-on-year increase of 4.7%.
In terms of construction, the capacity utilization rate of China’s oil and gas exploration industry was 89.0% in the fourth quarter, maintaining a high level. The capacity utilization rate of the coal mining industry increased slightly to 76.4%, also at an all-time high.
Investment advice
The rapid increase of global vaccination rate has gradually weakened the impact of the epidemic, promoted the sustained recovery of the global economy and increased energy demand. However, the relative lag in supply recovery has led to a sharp rise in energy prices. During the period of rising oil prices, the rise of capital expenditure of oil and gas companies generally lags behind oil prices by about 1.5-2 years. Therefore, in the future, as oil and natural gas prices remain high, it is expected that the capital expenditure of oil and gas companies will also stabilize and recover, driving the increase in demand for relevant equipment. With the gradual return of coal prices to stability and the continuous growth of enterprise profits, it will promote the increase of capital expenditure. Driven by policies such as increasing production and ensuring supply and replacing advanced production capacity, the fixed asset investment of high-quality coal enterprises is still expected to maintain growth. Therefore, we maintain the “overweight” rating of the energy equipment industry.
Risk tips
The sharp drop in energy prices has reduced the willingness of enterprises to spend capital. The global economic recovery was less than expected.
