Oil price is at the end

The easing of the epidemic is one of the important reasons for the high oil price. However, the recent resurgence of the epidemic in Europe the United States has disturbed the path the actual demand to the expected demand for crude oil.

Under normal circumstances, the vaccine delivery is smooth, the crude oil demand recovers smoothly. There is nothing wrong with raising the crude oil demand expectation. However, with the recent aggravation of the epidemic situation frequent vaccine problems, OPEC IEA still raised their crude oil demand expectations one after another, driving the oil price to continue to rebound. If the US "ten bonds" yield has driven inflation expectations in the past few months, we need to be vigilant about whether inflation expectations can continue to rise. I am afraid there is much room for inflation expectations to rise. Although crude oil is still destocking, it is an indisputable fact that the gap between supply demand in the crude oil market has narrowed the speed of destocking has slowed down. If crude oil Iran Venezuela returns, whether the fragile crude oil market can digest the new production capacity by relying on strong demand, as described by many investment banks, is a matter of different opinions. If the global crude oil demand in 2020 is driven by China, that in 2021 is driven by European American countries, the reality is that Europe America are disturbed by the epidemic situation, the recovery of demand is hindered; It seems that in addition to aviation coal demand, other demand has returned to normal level. EIA predicts that aviation coal demand will fully recover in 2030, the destocking of supply demand gap brought by expected demand recovery of the transaction will still face a test.

The price of fuel oil follows that of crude oil, which has continued to rebound recently, driving the price of high sulfur 380 fuel oil to continue to rebound. We believe that the price of fuel oil is at the end of a bolt. Enterprises should actively seize the opportunity of short hedging. The reasons are as follows:

1. The price difference of high sulfur fuel oil cracking is more favorable than that of finished product cracking; On the contrary, if we think that the general direction of the future is recovery, then the spread should be short.

2. Under the background of gradual increase of OPEC + crude oil production the difficulty of substantial increase of crude oil production in the United States within this year, the global refinery feedstock will transition light to heavy, which is reflected in the weakening of Dubai Brent crude oil price gap the increasing of crude oil price gap.

3. Compared with the same period in 2020, the output export volume of Russian fuel oil will grow close to the same period in 2019. In addition, Russia intends to reduce the export tariff of crude oil recently (the export tariff of crude oil is consistent with that of fuel oil), which may mean that the output export volume of Russian fuel oil will rise slowly.

4. OPEC + crude oil will gradually increase. The United States India will gradually reduce the purchase of high sulfur fuel oil, increase the purchase of crude oil countries such as Saudi Arabia. Recently, we have seen that the demand for fuel oil processing in the United States has gradually declined.

5. The increase of power generation demand in Saudi Arabia will greatly weaken the support of fuel oil market. Recently, Saudi Arabia has stopped importing fuel oil Singapore. On the one hand, the crude oil supply in Saudi Arabia has gradually increased, the fuel oil supply has gradually increased. On the other hand, the power generation economy of fuel oil is no longer better than that of natural gas, Saudi Arabia is expected to return to natural gas power generation. Even if the peak power generation season comes, Saudi Arabia's demand for fuel oil will surge, Saudi Arabia is expected to purchase fuel oil Europe, its demand for fuel oil Singapore will decrease.

6. the position point of view, this round of Fu realized a sharp rebound in futures prices by reducing short positions. The main driving force is the rebound of crude oil. At present, there is no sign that bulls actively squeeze their positions. The monthly difference is still negative. The low internal external price difference is a supporting factor for Fu, which all depends on imports. However, with the increase of fuel oil supply in Singapore the decline of demand, The internal external price difference does rule out the trend of expanding first then narrowing.

The main risk point is that the price of crude oil is higher than expected the supply of fuel oil is lower than expected.

To learn more about energy trading platform, you are welcome to consult Eurasia international energy trading market management (Jiangsu) Co., Ltd., a manufacturer of financial services platform, warehousing logistics platform, hazardous chemicals business license processing platform bulk energy trading platform.

Source: International Petroleum Network