Recently, international oil prices have experienced large-scale fluctuations. After the sharp drop last week, international oil prices have risen significantly again. Many people Everyone thinks that international oil supply exceeds demand. How should we view the international oil price increase again?
The recent sharp rise in oil prices has been followed by speculation. . Although Saudi Arabia and its OPEC-led group control crude oil supply and market price stability, the U.S. dollar and the Federal Reserve’s monetary policy are the real key factors. The real purpose of speculators may be to make profits by pushing up option prices and increasing oil price fluctuations. The Federal Reserve has repeatedly emphasized that inflationary pressure may be a short-term phenomenon, and the market expects the Federal Reserve to continue its extremely loose monetary policy for a long time. Only then did hedge funds dare to take the plunge and speculate on crude oil and other commodities.
Observing the recent ups and downs of oil prices, it is obvious that speculation is surging, and there are many who are bullish. Crude oil prices have continued to climb this week, with WTI rising from just over $66 a barrel to about $76 over the past month, while Brent crude has touched $76 a few times from $68.30 to reach a more than two-year high. Bank of America’s latest pricing outlook believes that Brent crude oil prices may reach US$100/barrel next year; Nigeria’s Minister of Petroleum even asserted that if investment in oil and gas is not increased, oil prices will soar to US$200/barrel. Of course, there are also many rational analysts who believe that it is difficult for crude oil futures speculation to set off another huge wave, and the possibility of a sharp rise in oil prices is extremely slim. What is the unknown story behind this fierce battle between long and short?
The standard bearer for the bullish call is Goldman Sachs. The reasons given by Goldman Sachs are very good and important.
First of all, oil, as the “mother of inflation”, is the best hedge against inflation. The specific trend of oil prices depends on the relationship between supply and demand, the strength of the US dollar and inflation. Goldman Sachs predicts that the average price of Brent crude oil will reach US$70/barrel in the second quarter of 2021, compared with the previous forecast of US$60/barrel; it will reach US$75/barrel in the third quarter. At the same time, factors driving this round of oil price increases include forward price increases due to speculation, and a sharp rise in spot premiums driven by tightening policies. Goldman Sachs suggests that in the future high-inflation environment, investors should seize the opportunity to buy lagging real assets, assets that benefit from fiscal stimulus and energy-intensive recovery, and assets that can hedge against inflationary shocks, and oil is the best choice. It is worth noting that Goldman Sachs mentioned in its report as early as the beginning of the year that speculative capital inflows will steadily push up oil prices in the coming months.
Secondly, there are structural problems on the supply side. The sharp decline in global fossil energy capital expenditure and the pursuit of free cash flow by shale oil companies will offset the increase in crude oil supply from non-OPEC countries. In terms of “OPEC+” (OPEC+), even if member states choose to increase production by 4.4 million barrels per day, there will still be a gap of 1.35 million barrels per day this summer, not to mention that Saudi Arabia is still leaving room for future production increases. The wild card is Iranian oil exports. Speculators are betting that Iran’s newly elected president is unwilling to compromise and continue nuclear negotiations, and the United States is likely to delay lifting oil sanctions.
The International Energy Agency’s monthly report shows that global oil demand is expected to grow by 5.4 million barrels per day this year and 3.1 million barrels per day respectively by the end of 2022. Global oil demand is expected to reach 100.6 million barrels per day. The World Bank’s latest report raised its global economic growth forecast for 2021 from 4% to 5.6%, and its 2022 economic growth forecast was also raised by 0.5 percentage points to 4.3%. These data strongly support the improvement of oil prices. According to Goldman Sachs, commodities have always been at the core of inflation. The key is that this time it is not cost-push inflation, but demand-pull inflation.
It can be seen that in order to see clearly the trend of oil prices, we must first understand the global inflation trend, especially the Federal Reserve’s monetary policy and its impact. There were rumors in the market that more and more hedge funds believed that the Federal Reserve made a huge mistake by ignoring inflation pressure, and capital wanted to punish it by betting on a sharp rise in oil prices.
Regardless of whether this statement is reliable, in fact, as long as the Fed tightens its quantitative easing policy later, these hedge funds believe that they are crazy about buying call options. The odds of winning are higher. The latest data from the U.S. Commodity Futures Trading Commission shows that as of the week of June 1, the net long position of WTI crude oil futures options held by asset management institutions, mainly hedge funds, surged by 16.38 million barrels from the previous week, and will expire in December next year. Net long positions in call options surged.
Crude oil has become the price target, and PTA will not rise in vain
But the space above needs to be treated with caution
In the second half of the year, from the perspective of the recovery of social mobility brought about by the lifting of restrictions in many regions in Europe and the United States, crude oil targets and targets close to terminal demand areas are more likely to become “multiple” in the commodity market. Therefore, we have seen that the entire chemical sector has been favored by funds recently. Among them, PTA, known as “small crude oil”, is naturally the first choice. This is also the reason why PTA has increased its position.The primary logic of execution.
At the same time, there are some unexpected positive factors in the fundamentals at this stage. One of them is the start-up progress of a new 3.3 million ton device in East China – this device After entering acid after the Dragon Boat Festival, it was officially put into production around the 18th. However, it is still in the debugging state and has not produced qualified products. Secondly, the start-up debugging process of a new PX device in Zhejiang has also been interpreted as “profitable”—— The new device also entered the debugging stage in the second half of this month. During the debugging process, its first-phase refinery reforming unit and aromatics combined unit cooperated with debugging to reduce production load, resulting in a total production reduction of 4 million tons (the plan was about a week when it was first announced). Although On the 18th, the manufacturer restarted the 2 million tons unit, but the current news is that the other 2 million tons may be suspended for another month. Third, at the beginning of last week, the two major domestic PTA suppliers once again announced a reduction in the supply of PTA contracts in July. Among them, Hengli Petrochemical reduced its supply to 50%. Previously, its April contract supply was 70% and May supply was 6.50%. , supply at 60% in June; Yisheng reduces its supply to 70% – previously its April contract was supplied at 80%, May at 50%, June at 50%, etc.; Yisheng is enlarged into a set of supporting equipment The 2.25 million ton unit may be shut down for more than two weeks in July, and Hengli’s PTA unit, which was deferred for maintenance in June, may also be shut down for more than two weeks in July. In addition, Taihua, Hailun, Honggang, etc. all have maintenance plans for July. However, the possibility of restarting several small devices parked in the early stage in July is still very low, and PTA is currently expected to continue destocking in July. These three bullish points have contributed to the dominant factor in the PTA market price rising from 4,700 yuan/ton to around 4,950 yuan/ton. We can regard it as a process of repairing processing fees and “disconnecting” the valuation of early PTA and crude oil prices. In addition, PXN and PTA processing fees have been restored to a “no loss” level.
Table 1 PTA price derivation under different crude oil price benchmarks (unit: yuan/ton, US dollar/ton, US dollar/barrel)
So back to the current PTA, how will it go after the new high? After all, after further increasing positions and breaking the previous high last Friday, the technical school has already forecast a height of above 5,600.
From a fundamental point of view, the recent bullish factors mentioned above that supported the first period of rise are real, and two of them are real. It can be said that the original negative has turned into a positive, so whether it is PXN or PTA’s processing fee, it is indeed in line with short-term logic to stay near US$240/ton or 600 yuan/ton. It is appropriate to put some emotional premium and crude oil The expected premium under configuration is not excessive either. At the same time, there have been some signs of improvement in the terminal since last week. The sales of network yarn have made DTY inventory better than POY and FDY, which has led to an intuitive decline. Therefore, PTA will not “rise in vain” so quickly. The current market is likely to be There is continuity.
But if crude oil cannot give bullish expectations above $80/barrel, the space above PTA needs to be treated with caution. After all, none of the above-mentioned bullish factors are bullish logic that can hold up in the long term – new devices can always be debugged, maintenance plans for several devices in July may be postponed or canceled due to the recent rapid expansion of processing fees, and the story of crude oil quotas may Being perjured, it is recommended to try to choose the mid-to-lower correction of PXN and PTA processing fees based on the price of crude oil to buy, instead of chasing the rise in the upper edge area during the high stage of crude oil.
</p
