On Thursday (November 18) Shanghai crude oil prices fell sharply, hitting a six-week low. The main contract 2201 ended at 489.9 yuan/barrel, down 21.9 yuan/barrel, or 4.28%, after the Organization of Petroleum Exporting Countries (OPEC) and The International Energy Agency (IEA) warned that the supply is about to be surplus, and the increase in the number of new crown cases in Europe has exacerbated the downside risk of demand recovery.
Both the International Energy Agency and OPEC have indicated in recent weeks that supply may increase substantially in the coming months. OPEC+ maintained an agreement to increase production by 400,000 barrels per day per month to avoid oversupply.
The new wave of COVID-19 in Europe has prompted some governments to re-impose restrictions, and Austria has ordered restrictions on unvaccinated individuals
List of futures contracts and transactions
Trading summary and trading strategy
The price of crude oil in Shanghai plummeted, hitting a six-week low. The main contract 2201 ended at 489.9 yuan/barrel, down 21.9 yuan/barrel, or 4.28%.
(INE crude oil daily chart)
Trading logic: oil prices fell sharply on Wednesday, and the gap accelerated during the Asian session on Thursday, reaching a six-week low. Oil prices may have peaked, and the mid-to-long-term market has ushered in an inflection point. From a technical point of view, MACD and KDJ cross, but oversold signals have emerged, which may be expected to limit its decline. However, overall, oil price shorts are currently in a strong position, and investors are advised to continue to short rallies.
Resistance levels: INE crude oil at 500.0, US oil at 78.25
Support levels: INE crude oil at 486.0, US oil at 76.30
China and overseas news
National Pipeline Network Group Ripuluo Crude Oil Pipeline Project was successfully put into operation once
The Rizhao-Puyang-Luoyang crude oil pipeline, a key national oil and gas infrastructure project, was successfully put into operation. This is another important measure taken by the National Pipeline Network Group to ensure national energy security and stabilize energy “rice bowls”. The provincial energy supply structure is of great significance. (Securities Times)
Oil prices continue to fall and hit a new low in more than a month. The United States seeks to reduce prices through the release of crude oil reserves from multiple countries.
① Following the overnight plunge, U.S. crude oil continued to be under pressure on Thursday. The lowest January contract of U.S. crude oil hit 76.81, a new low since October 8. The report said that the United States is asking major oil-consuming countries such as India and Japan to consider coordinating the release of oil reserves to keep oil prices down.
② The US government’s move coincided with the beginning of political influence in part of the inflationary pressure driven by soaring energy prices.
③Oil prices hit a seven-year high last month, because the market is concerned that with the lifting of the blockade and economic recovery, demand has risen rapidly, while the Organization of Petroleum Exporting Countries and its allies (OPEC+) have been slow to increase production.
④ Citigroup analysts report, “If the US government orders the release of SPR (Strategic Crude Oil Reserve), this may send a strong political signal, but… domestic refineries are unlikely to receive additional help because light oil The output seems to have reached its limit.”
⑤They added that it refers to the profit from the production of gasoline and other automobile fuels.
⑥ The International Energy Agency and OPEC have stated in recent weeks that there will be more supplies in the coming months. OPEC+ maintains its policy of increasing production by 400,000 barrels per day per month to avoid flooding the market with supply
IHS Markit: Banning U.S. crude oil exports may increase gasoline prices instead of lowering them
① Jim Burkhard, Vice President and Head of Crude Oil Markets at IHS Markit: The US crude oil export ban will make the situation in the US and the world worse, and at this time the global supply chain is already in an abnormally tense state. “This ban will disrupt global oil supply The chain, which runs counter to the U.S. policy of promoting the free flow of oil and natural gas for decades, has led to inefficient and expensive redistribution of domestic crude oil production, disrupted supply to allies, and hindered domestic production–all of which will bring about US gasoline prices. Come upward pressure.
② It will also send a disturbing signal to allies and partners about the reliability of the United States. The price of gasoline in the United States is related to the global oil and gasoline market, not to the price of domestically produced crude oil. Banning the export of domestic crude oil production may lower the price of domestic crude oil. However, this may hinder the production of oil and natural gas, and the result may be tighter world oil markets – but it will not reduce gasoline prices.
③ On the contrary, the interruption of the oil supply chain may increase gasoline prices, and the cancellation of the 3 million barrels of crude oil exported by the United States to Europe, Asia and other regions will have an impact on the world market.This interruption in the flow of international crude oil will cause people to scramble to find other oils and exert greater upward pressure on crude oil prices, thereby increasing the price of gasoline in the United States.
The direct production of ethylene from crude oil, the first successful industrial application of my country’s oil conversion technology
① Sinopec announced on the 17th that its key research project “Technology Development and Industrial Application of Light Crude Oil Cracking to Ethylene” has been successfully tested in its subsidiary Tianjin Petrochemical Industry, which can directly convert crude oil into chemicals such as ethylene and propylene (ie “oil conversion” ), realized the first domestic industrial application of crude oil steam cracking technology, with a chemical yield of nearly 50%, and greatly shortened the production process, reduced production costs, and reduced carbon dioxide;
② According to Sinopec, the crude oil steam cracking technology for industrialized application is one of the routes of “oil conversion”. It “skips” the traditional crude oil refining process and directly converts crude oil into chemicals such as ethylene and propylene, which is equivalent to wheat The intermediate link of grinding into flour is omitted, and it is directly made into bread. This will greatly shorten the production process, reduce production costs, and significantly reduce energy consumption and carbon emissions. At present, only ExxonMobil and Sinopec in the world have successfully realized the industrialized application of this technology (Science and Technology Daily)
Germany’s new diagnoses hit a record high in a single day, Merkel warned that the fourth wave of epidemics is coming
The German disease control agency announced on the 17th that the number of newly diagnosed new crown virus infections was 52,826, once again setting the country’s record for the number of new diagnoses in a single day since the outbreak. German Chancellor Angela Merkel warned that the country’s epidemic situation is very severe and that the fourth wave of the epidemic has already hit. Merkel called on the German states to determine an epidemic prevention alert value as soon as possible. After reaching this value, additional epidemic prevention measures should be taken to avoid overloading medical institutions. She said that if you wait until the intensive care beds in the hospital are full before taking action, the consequences will be catastrophic. (China News Service)
France newly diagnosed more than 20,000 in a single day, and officially confirmed that it has entered the fifth wave of epidemic
On the 17th local time, there were more than 20,000 new confirmed cases of new coronary pneumonia in France in a single day, and the total number of confirmed cases reached 7.33 million. French officials confirmed on the same day that France has entered the fifth wave of epidemics. According to official French data, there were 20,294 new confirmed cases in a single day in France on the 17th, a new high since the end of August; a total of 7,330,958 confirmed cases were confirmed. The cumulative number of deaths in France is now 118,321, with 50 new deaths. The number of inpatients and severely ill patients in France is still increasing. Among them, the number of inpatients is now 7,663 and the number of severely ill patients is 1,300. French government spokesman Attar held a press conference on the same day to report the situation of the epidemic on behalf of the government, confirming that France has entered the fifth wave of epidemics, the epidemic situation is rebounding everywhere, and the new crown virus is continuing to spread. But he also said that the authorities are ready for the arrival of the fifth wave of the epidemic (China News Network)
Institutional perspective
Guotai Junan Futures: Inflation premium declines, short-term decline may accelerate
Returning to the fundamentals of crude oil, the cracking spread of refined oil products in Europe and the United States is still strong, and the US crude oil inventories have not exceeded the seasonal rhythm of the accumulation performance, which confirms that the tight supply pattern has not yet eased. Taking into account that the operating rates of European and American refineries are still in a seasonally increasing stage, superimposed on the issuance of China’s early crude oil import quotas, the demand for primary crude oil processing in the northern hemisphere is still expanding, and the market has not yet falsified expectations of tight energy supply. Therefore, the recovery of transportation combined with the positive demand for heating oil and diesel fuel in the cold winter in the northern hemisphere still supports the center of gravity of oil prices not to fall too deeply. If there is no new unexpected increase in supply before the sudden landing (such as OPEC+’s unplanned increase in production, the US lifts sanctions on Iranian crude oil exports, and the US shale oil recovers significantly beyond expectations, etc.), after this round of callbacks, it will be at least twice in the end of Q4 this year. Oil still has the possibility of a new high. Among them, Brent is likely to exceed $90/barrel in the future.As for the SC crude oil in the domestic market, with the further digestion of future warehouse receipts and the recent increase in the prices of refined oil products such as diesel in Asia, it may lead to a slight rebound in the operating rate of refineries in the future. May exceed 580 yuan/barrel
Zhuo Chuang Information: Crude oil trend is weak, domestic refined oil retail price limit may be lowered tomorrow night
Zhuo Chuang Information analyst Meng Peng said on November 18 that since the current pricing cycle of domestic refined oil products, on the one hand, the oil market supply shortage still supports crude oil prices, but on the other hand, the Federal Reserve has accelerated its interest rate hike plan to curb inflation and the US dollar exchange rate. There are concerns about strengthening and the possible release of strategic oil reserves in the United States. Crude oil futures prices in Europe and the United States have shown a fluctuating trend as a whole, and the average price has declined compared with the previous cycle.Affected by this, the domestically estimated rate of change of crude oil continues to expand within a negative value. Therefore, it is expected that the domestic retail price of refined oil will be lowered at 24:00 on November 19
Early comments on crude oil futures: global oil supply will be surplus, oil prices remain volatile and weak
Despite the decline in US crude oil inventories, crude oil inventories in the Cushing region of the United States increased for the first time in six weeks. The United States continued to release strategic oil reserves and worried about market surplus. European and American crude oil futures fell 3% to the lowest since early October. Both the International Energy Agency and OPEC believe in their monthly reports that there will be a surplus of global oil supply in 2022. Technically, oil price volatility weakened. Operation suggestion: shock and partial empty thinking operation. (Guoxin Futures)
Huatai Futures: The United States requires Asian countries to coordinate the release of strategic reserves
Oil prices fell yesterday. According to EIA data, there is no significant negative. Crude oil and refined oil inventories have fallen more than market expectations, and Cushing’s inventory has increased slightly. We believe that the current focus of the market still comes from the Biden administration’s approach to future oil price control and possible novelty. On the 17th, the U.S. Department of the Interior auctioned a large number of oil and gas exploration rights in Mowan. At the just-concluded Xi Bai meeting, Biden It also requested China to release its strategic reserves. For the time being, Biden has asked many Asian countries including Japan, South Korea, India, China and other Asian countries to jointly release strategic reserves. In addition, the United States said it will also study gasoline price pricing and manipulation issues. . We believe that this series of actions are sending a clear signal to the outside world that the Biden administration is determined to suppress gasoline prices, and the policy tools used are not limited to the release of strategic reserves, and the market is increasingly concerned about the policy side.
Everbright Futures: Crude oil prices will weaken downward
US crude oil inventories in Cushing, Oklahoma, during the week ending November 12, recorded an increase of 216,000 barrels, the first increase in inventories since the week of October 1. Last week, crude oil inventories fell by 2.1 million barrels, gasoline inventories fell by 700,000 barrels, refined oil inventories fell by 820,000 barrels, and production fell by 100,000 barrels per day. The market is currently conducting anticipatory management through the release of oil reserves and other news, but as the end of the year draws closer, the high oil price is under pressure. If the “cold winter” is quietly absent, the high point of the oil price during the year will be determined and the price will weaken downward.