Cai Yuekun, reporter from Economic Observer Network After the crude oil price crossed the $100 mark, it continued to soar, breaking through $130 on March 7.
On the morning of March 7, international crude oil prices continued to soar sharply. US WTI crude oil rose to a maximum of US$130.50 per barrel, and Brent crude oil rose to a maximum of US$139.13 per barrel, hitting a new high since July 2008.
At the level of market news, the conflict between Russia and Ukraine may bring greater variables to European imports of Russian oil.
As of 15:00 Beijing time today, Brent crude oil remained at around $130 a barrel, a drop in earlier trading.
“The price of crude oil has risen sharply, resulting in an increase in the cost of producing chemical products. Therefore, if the price of products does not rise, it will lose money.” On March 7, 2022, a person from a petrochemical enterprise told the Economic Observer Network.
The reporter noticed that the price of energy INE crude oil futures exceeded 760 yuan per barrel in the last issue, hitting a new record high since its listing in 2018.
Regarding the impact of the continuous rise in oil prices, the above-mentioned petrochemical companies told reporters that the current dependence on foreign oil is more than 70%, and the impact of the continuous rise in oil prices on related companies is very large. In the process of rising oil prices, some large state-owned enterprises in the upper reaches of the industry will use some financial tools to resist risks, but they can only solve temporary needs.
The data shows that in 2021, China’s crude oil imports will be 513 million tons, a year-on-year decrease of 5.3%, the first decline; the crude oil dependence on foreign countries will drop from 73.6% in the previous year to 72%, a decrease of 1.6%.
The above-mentioned petrochemical company sources said that the main reason for the decline in crude oil imports in 2021 is that the international oil price was high last year, and the domestic intensified mining efforts will reduce some external demand. Although the country’s crude oil storage is large, the current extraction cost is too high.
A crude oil futures researcher told reporters that the price of Brent crude oil rose 18% to $139.13 at one point, and the market was worried that Russian crude oil would withdraw from the market supply, causing a huge supply gap.
The researcher analyzed that Russia is the world‘s largest exporter of oil products. In December last year, Russia’s total oil exports were about 7.8 million barrels per barrel, and crude oil exports were 5 million barrels per day. Among them, exports to Europe accounted for 60%, and China accounted for 20%. When Russian exports are fully sanctioned, there will be a gap of 4 million to 5 million barrels in the global crude oil market. OPEC is currently unable to fill this gap, and there is not much incentive to fill it. Iran has not returned to the international market in a short period of time, and even if it does, it will not be able to reach the highest production capacity in a short period of time. So the gap is huge.
For crude oil prices to rise further, the Jinxin Futures analysis report said that in the short term, the issue of geopolitical conflicts between Russia and Ukraine is still the main driver of the crude oil market. If the U.S. and European markets impose sanctions on Russian crude oil, the international crude oil supply will be tight. Will be more prominent, crude oil prices will continue to rise. For the domestic chemical market, the direct downstream commodity fuel oil, low-sulfur fuel oil, bitumen and polyester (PTA/PF) commodities follow the rising cost.
Regarding the future prediction of oil prices, the above-mentioned petrochemical industry people believe that Russia is an important crude oil exporter, and the current increase in crude oil prices is mainly affected by the situation in Russia and Ukraine. Judging from the current situation, there is still a high probability of rising in the short term. Coupled with the severe global epidemic and the difficulties in economic recovery of various countries, the trend of rising raw materials is difficult to reverse. However, the international situation has changed suddenly, the rise is unsustainable, and it is not easy to predict which point it will start to fall.
Airline stocks tumble
In addition, airline stocks tumbled today. As of the close, Air China (601111.SH) fell 9.9% to 9.28 yuan per share; China Southern Airlines (600029.SH) fell 9.79% to 6.54 yuan per share; China Eastern Airlines (600115) .SH) fell 8.62% to 5.30 yuan per share.
A-shares on the whole also showed a trend of lower opening and lowering today, and the Shanghai A-shares fell by 2.17%. The Shenzhen Index fell 3.43%, while the ChiNext Index fell 4.3%.
Analysts said that the rise in oil prices will bring more cost pressure to airlines, thereby affecting their profit margins and forming a substantial negative.
On March 1, some airline ticket agents such as Qunar.com received news from domestic airlines that they will raise the fuel surcharge collection standard for domestic routes on March 5. According to the notice, starting from March 5, 2022 (the date of ticket issuance), the fuel surcharge for all domestic routes will be charged as follows: 20 yuan for each passenger on routes below 800 kilometers (inclusive), and 20 yuan for each passenger on routes above 800 kilometers. Passengers will be charged a fuel surcharge of RMB 40.
The resumption of the collection of fuel surcharges for domestic routes is related to the recent increase in domestic aviation fuel prices.
East Asia Qianhai Securities analyzed today that oil prices are rising rapidly, and airline operations are under pressure. The cost of jet fuel is the most important cost of airlines and has a greater impact on profits. In the case of a rapid rise in oil prices in the short term, airlines may pass on cost pressures to consumers, suppressing some travel demand.
The research report of China Securities Investment also pointed out that the continued conflict between Russia and Ukraine may affect the recovery of international passengers, and the continued rise in international oil prices may increase the operating pressure of airlines. At the same time, the continuous rise of international oil prices will also significantly increase the price of aviation kerosene and increase the operating pressure of airlines. If the airline increases the fare accordingly, it may delay the recovery of the international tourist flow.
East Asia Qianhai Securities said that since the outbreak of the epidemic, civil aviation passenger demand has shown strong resilience, while freight demand has surpassed pre-epidemic levels faster, mainly due to the rapid and effective control of the domestic epidemic and the recovery of the economy. In the medium and long term, with the improvement of the epidemic situation, under the influence of the government’s bailout policies and precise epidemic prevention measures, the demand for civil aviation passenger and cargo is expected to grow rapidly.Return to Sohu, see more