Recently, the peak of oil demand in the northern hemisphere is approaching, and market concerns about insufficient supply have pushed oil prices to continue to rise, reaching new highs since March.
As international oil prices continue to rise, domestic retail price limits for refined oil products will continue to rise, and the price of 95-proof gasoline in some areas may enter the “10 yuan era.”
Oil price hits $150/barrel
Although OPEC+ has proposed a plan to accelerate production increase, the market is not optimistic about the actual effect of the organization’s increase in production. Coupled with the implementation of EU sanctions on Russian oil and the arrival of the peak summer demand season in the northern hemisphere, international oil prices continue to rise, reaching new highs since March. .
As of the close on the morning of June 9, Beijing time, the price of WTI crude oil futures for July delivery rose 2.26% to close at US$122.11/barrel; the price of Brent crude oil futures for August delivery rose 2.5% to close at US$123.58/barrel. bucket.
The impact of the current high oil prices on the economy, finance and life is gradually emerging. On June 7, the World Bank further lowered its forecast for global economic growth in 2022, predicting that the global economic growth this year is expected to be 2.9%, while its forecasts in January and April this year were 4.1% and 3.2% respectively. In addition, the OECD has also lowered its economic growth forecast, predicting that the global economy will grow by 3% this year, lower than the 4.5% forecast in December last year; the OECD predicts that global economic growth will slow down further in 2023, and the forecast is lowered from the previous 3.2% to 2.8%.
Economies from Europe to North America are being hit by high oil, gas and electricity prices.
Jinlianchuang analysis pointed out that this year will be extremely difficult for the crude oil market. The epidemic situation in many parts of the world is still on the verge of a counterattack. New strains of the virus are also spreading in some countries, and there is great uncertainty in economic growth. The game between Europe, the United States, etc. and Russia has also brought many unexpected impacts to the global market.
In terms of oil supply, OPEC+’s control over crude oil supply has exceeded its capabilities. Officials from the organization said that currently, except for Saudi Arabia and the United Arab Emirates, which still have some idle production capacity, and Iraq and Kuwait, which still have limited room to increase production, the rest of the member states have limited oil production. The limit has been reached.
With the peak summer crude oil consumption season in the northern hemisphere, travel demand in Europe and the United States will increase significantly. China’s crude oil demand is also continuing to recover. Crude oil consumption is expected to remain high from June to September.
Jin Lianchuang pointed out that based on past experience, North America has a high incidence of hurricanes in the summer. Once a hurricane hits the Gulf of Mexico, it will cause large-scale refinery supply interruptions, thus further tightening oil supply.
In a recent interview with S&P Global Platts, the relevant person in charge of the International Energy Agency pointed out that the current high oil prices have caused damage to market demand, and consumers are adjusting their energy prices based on factors such as energy prices, income, consumer confidence, and alternative energy. Crude oil demand.
The U.S. Energy Information Administration (EIA) predicts that the average price of Brent crude oil will reach US$108/barrel in the second half of 2022, and the average price will drop to US$97/barrel in 2023. EIA stated that sanctions and related actions against Russia will directly affect Russian oil production and its sales in the global market.
Citibank, JPMorgan Chase, Goldman Sachs and other institutions have also raised their expectations for international oil prices. Oil trader Tiafigura pointed out that global oil supply has been tense due to insufficient investment for many years. Export sanctions against Russia have aggravated this tension. Oil prices may rise to US$150/h in the next few months. The barrel is even taller.
Refined oil prices will see tenth rise this year
According to calculations by Jin Lianchuang, a commodity information agency, as of June 9, the seventh working day of this round of price adjustment cycles, the average price of reference crude oil varieties was US$118.91/barrel, with a change rate of 5.28%, corresponding to the domestic retail price limit of gasoline and diesel Will be raised by 320 yuan/ton.
The current round of refined oil price adjustment window will open at 24:00 on June 14. There are currently only three working days left before the price adjustment window. International oil prices continue to run at high levels, and this round of retail price limit increases is already a certainty.
Since the beginning of this year, domestic refined oil products have experienced a total of ten price adjustments, nine of which were upward, showing a trend of “nine increases, one decrease, and zero stranding”. All increases and decreases were balanced. During the year, the prices of gasoline and diesel increased by 2,330 yuan and 2,245 yuan per ton respectively.
Jinlianchuang monitoring data shows that as of June 9, the retail price limit of No. 92 gasoline in major domestic cities has remained at around 8.8-9.1 yuan/liter, and the retail price limit of No. 0 diesel has remained at around 8.6-8.8 yuan/liter. The retail price limit of No. 95 gasoline remains within the range of 9.5-9.8 yuan/liter.
According to the current calculation of the price adjustment range of refined oil products, the corresponding price increase of No. 92 and No. 95 gasoline will exceed 0.25 yuan. It is expected that the retail price limit of No. 95 gasoline in many places in China will be close to or enter the “10 yuan” era.
Domestic gasoline and diesel prices continued to rise this week, but the improvement in the overall buying and selling atmosphere was limited. Jinlianchuang analysis pointed out that the beginning of this week coincided with the Dragon Boat Festival holiday, the crude oil trend continued to rise, and the local refining market continued to rise after a brief downturn. Returning from the holiday, fueled by the rise in crude oil, retail price increases are expected to continue to widen, and the Ministry of Commerce has issued temporary export quotas. The news has provided strong support, and the quotations of main business units have continued to rise.
Among them, the cumulative increase of gasoline is 250-350 yuan/ton, and diesel is subject to demand.The price is at $130, which will be $130 in the first and second quarters of next year.
Citibank has also recently raised its Brent oil price forecast. It currently expects Brent crude oil prices to be US$113 per barrel in the second quarter of this year, higher than the previous forecast of US$99 per barrel. The price forecasts for the third quarter and fourth quarter have also been raised to US$113 per barrel. US$99 and US$85 per barrel.
Cheng Xiaoyong, director of the Baocheng Futures Financial Research Institute, said that in the short term, due to geopolitical factors, Russian crude oil supply has gradually been compressed in the global crude oil market, and the remaining production capacity of OPEC crude oil is not high, resulting in OPEC increasing production not being enough to make up for Russian crude oil exports. The supply gap caused by the decline. However, the demand outlook is also not optimistic. High inflation and monetary tightening are leading to a slowdown in world economic growth or even recession.
The Organization for Economic Cooperation and Development (OECD) on Wednesday lowered its forecast for economic growth and raised its inflation forecast, saying that although the global economy should be able to avoid stagflation like the 1970s, the geopolitical situation has made the growth outlook far bleak. The OECD expects the global economy to grow by 3% this year, well below the 4.5% growth forecast when it updated its forecasts in December.
Cheng Xiaoyong believes that in the short term, investors can consider buying CME Group’s newly launched micro WTI crude oil monthly call options to hedge the risk of high oil prices. In the medium term, short orders in far-month crude oil futures and the purchase of forward micro WTI crude oil monthly put options can be appropriately placed to hedge against losses caused by the peak and fall of high oil prices in the second half of the year.
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