IEA raised its crude oil demand forecast, and international oil prices rose slightly
This week, U.S. crude oil inventories rebounded, IEA released a monthly report to further raise its forecast for crude oil demand, and international oil prices rose slightly. As of January 21, Brent and WTI crude oil futures prices closed at US $87.89/barrel and US $85.14/barrel respectively. The US dollar index closed near 95.6.
The number of oil drilling rigs in the United States increased, and the crude oil inventory increased by 520000 barrels
This week, the number of active oil drilling wells in the United States decreased by 1 to 491, and the total number of oil and gas drilling rigs increased by 3 to 604. The US crude oil inventory was 413.8 million barrels, an increase of 520000 barrels over the previous week; The total gasoline inventory in the United States was 246.6 million barrels, an increase of 5.87 million barrels over the previous week; Distillate stocks were 127.9 million barrels, down 1.47 million barrels from the previous week.
OPEC production increased in December 2021, with an increase of 167000 barrels / day to 27.882 million barrels / day compared with the previous month
OPEC output increased in December 2021, with Saudi Arabia’s output of 9.932 million barrels / day, an increase of 61000 barrels / day over the previous month; Iraq’s output was 4.27 million barrels per day, an increase of 28000 barrels per day over the previous month; Iran’s output was 2.478 million barrels per day, an increase of 8000 barrels per day over the previous month; Venezuela’s output was 681000 barrels per day, an increase of 56000 barrels per day over the previous month; Libya’s output was 1053000 barrels per day, a decrease of 84000 barrels per day compared with the previous month.
This week, naphtha, propylene, butadiene and pure benzene prices rose, while ethylene prices fell. The price difference of naphtha, PDH and MTO fell.
IEA raised its crude oil demand forecast, and the three major oil groups deployed their key work in 2022
This week, on the supply side, the crude oil facilities of the United Arab Emirates were attacked, but the crude oil transportation pipeline from Iraq to Turkey resumed operation, easing the short-term supply tension; On the demand side, US crude oil inventories rose for the first time in nearly eight weeks, and market concerns about the epidemic continued to ease. IEA released a monthly report this week. Due to the relaxation of epidemic prevention measures, it raised the demand growth forecast of 2021-22 by 200000 barrels / day. It is expected that the global oil demand will increase by 3.3 million barrels / day in 2022, returning to the level of 99.7 million barrels / day before covid-19 epidemic; IEA believes that the production capacity of some OPEC + member countries is insufficient to reduce the supply growth expectation in 2022, but the rise in oil prices will enable us operators to invest more drilling platforms. It is expected that US oil production will increase by 1 million barrels / day to 17.7 million barrels / day in 2022; In addition, OPEC + production increase will lead to the decline of its idle capacity. By the second half of this year, the effective idle capacity (excluding Iranian crude oil closed due to sanctions) may be reduced from about 5 million barrels per day to less than 3 million barrels per day, most of which are held by Saudi Arabia and the United Arab Emirates. Overall, the pattern of crude oil supply and demand improved, and the international oil price rose slightly. This week, PetroChina, Sinopec and CNOOC deployed the key work in 2022. PetroChina emphasized the professional development, implemented the guidance of the central government on “double carbon” work, and strengthened the connection between production and marketing of natural gas; Sinopec emphasizes stabilizing oil and increasing gas, reducing cost and increasing efficiency; CNOOC emphasizes the steady increase in output and strives to promote the re innovation performance of the project of increasing reserves and production. In the follow-up, we will focus on the implementation of OPEC + production increase, the negotiation progress of Iran nuclear agreement, the spread trend of Omicron virus strain, vaccination and the development progress of covid-19 specific drugs.
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 and other 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 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 olefins, 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.
