It is expected that the new coronavirus vaccine will be gradually put into use in 2021 To slow down the impact of the epidemic on the market, the global economic recovery and the weakening of the US dollar are not expected to change. The overall market risk appetite will further rebound. Under the background of OPEC+ production cuts and the recovery of crude oil demand, the crude oil supply and demand balance sheet will be further repaired. Overall The center of gravity of oil prices has risen.
The global economy is slowly recovering, and the U.S. dollar has been weakening for a long time
Since 2020, the epidemic has The spread of the disease has had a huge impact on the world economy. As the epidemic eased in the second half of the year, major economies restarted their economies, market demand recovered, and the economic chain continued to recover. At the end of 2020, the vaccine was gradually put into use in some countries. If it can truly have an effect on the epidemic in the future, it is expected to further alleviate the impact of the epidemic on the economy. Since 2020, global monetary policies have continued to be loose, which has promoted the continued downward trend of the US dollar. However, after September, due to the delay in the implementation of US fiscal stimulus measures and the uncertainty surrounding the US election, the downward outlook for the US dollar has weakened, and has weakened. Staged rebound.
We believe that the current global economic recovery is still weak and needs the support of fiscal and monetary policies. In the future, countries will most likely maintain a loose financial environment to support economic recovery. This This means that the U.S. dollar will continue to weaken in the long term.
The picture shows the trend of the US dollar index and WTI crude oil
OPEC+ gradually increases production, US shale oil is weak Recovery
Upstream exploration investment is weak and global supply growth is limited in 2021
In 2020, most of the world’s oil exploration Companies have reduced investment, resulting in a sharp decline in crude oil output. Coupled with the initiative of major oil-producing countries to reduce production, crude oil supply has dropped significantly. According to EIA statistics, global crude oil supply will drop to 94.42 million barrels per day in 2020, a year-on-year decrease of 8.5%. According to Rystad Energy’s forecast, investment from global exploration and production companies (E&P) will reach approximately US$380 billion in 2021, almost the same as the same period in 2020.
The two major variables on the crude oil supply side in 2021 are still the OPEC+ production reduction alliance and U.S. shale oil. It is expected that OPEC+ will continue to implement the production reduction policy, but the extent of the production reduction will increase as demand recovers. shrink. U.S. shale oil showed signs of recovery at the end of 2020, and is expected to continue its weak recovery in 2021, with production expected to increase slightly. Overall, we expect that global crude oil supply will grow in 2021, but OPEC+’s production increase under the production reduction framework will be adjusted based on the recovery of demand. The growth of U.S. shale oil output will not be too large, and the increase in global supply is relatively limited.
The picture shows the capital expenditure of global oil exploration companies
OPEC+ will gradually increase production and increase potential supply Increasing pressure to reduce production
OPEC+ will gradually increase production starting in 2021. In early December 2020, the oil-producing countries meeting reached a new production increase agreement. OPEC+ agreed to adjust the production reduction from 7.7 million barrels per day to 7.2 million barrels per day starting in January 2021, with an increase of 500,000 barrels per day. A ministerial meeting will be held every month to assess market conditions and decide on the scale of production adjustments for next month, with monthly adjustments not exceeding 500,000 barrels per day. In addition, the compensation period for production reduction will be extended to the end of March 2021.
There is a high probability that oil-producing countries will continue to shrink their production cuts in 2021. On the one hand, as vaccine research and development speeds up, the impact of the epidemic on crude oil demand is expected to gradually weaken. When demand recovers, At the same time, the supply strategies of oil-producing countries will also be adjusted accordingly; on the other hand, crude oil experienced a wave of rise in late November 2020. After this round of rise, European and American crude oil prices entered the operating center of 40-50 US dollars per barrel. Level oil prices will promote the recovery of North American shale oil. If oil-producing countries continue to significantly reduce production to boost oil prices, it can be said to be a “wedding dress” for shale oil. Therefore, whether from the perspective of demand recovery or shale oil recovery, the extent of production cuts by oil-producing countries is expected to continue to shrink in 2021.
Libya, Iran, and Venezuela will bring potential supply increases. In the fourth quarter of 2020, as the domestic situation in Libya eased, Libyan crude oil supply recovered rapidly. Data show that Libya’s crude oil production reached 450,000 barrels per day in October. In the second and third quarters, the country’s crude oil production was less than 100,000 barrels per day. By the end of the year, the output is expected to be close to 1 million barrels per day. In addition, due to U.S. sanctions in recent years, crude oil supply from Iran and Venezuela has dropped significantly. After the new U.S. president takes office, sanctions on the two countries are expected to be relaxed or even lifted, which may bring 3 million to 4 million barrels per day to the market in the future. The potential increase in supply will put greater pressure on OPEC+ to reduce production, which may increase the internal conflicts of the OPEC+ production reduction alliance to a certain extent.
<img data-preview-src=""data-preview-group="1"src="http://pic.168tex.com/Upload/News/image/2020/12/25/2020122509353632500�willnotbeeliminated.Againstthisbackground,globalcrudeoilconsumptionwillcontinuetoberestricted,especiallyincountriessuchasEuropeandtheUnitedStatesthatarenotactiveinepidemicpreventionandcontrol.Itisexpectedthatglobalcrudeoilconsumptionwillbedifficulttoreturntopre-epidemiclevelsin2021.
ThespaceforfurtherrecoveryofU.S.demandisexpectedtobelimited
TheimpactoftheepidemicontheUnitedStatesin2020hasneverstopped.Atpresent,U.S.oilconsumptionhasAlmost90%hasbeenrecovered,buttherecoveryoftheremaining10%isdoubtful.Ontheonehand,theimpactoftheepidemicmaynotbecompletelyeliminatedinashorttime.Ontheotherhand,theepidemichasledtotheprevalenceofhomeworkingintheUnitedStates,andthedemandforlong-distancebusinesstripshasdroppedsignificantly.ThecurrentdemandforaviationkeroseneintheUnitedStatesisstillfarbehindthatbeforetheepidemic.Thisdemandmayhavesomeroomforrecoveryinthefuture,butitwillbedifficulttoreachthelevelbeforetheepidemic.Theroomforrecoveryofdemandforgasolineanddieselmayberelativelylimited.Overall,therewillnotbemuchroomforfurthergrowthinU.S.oildemandinthefuture.
China’srefinedoilmarketglutwillintensify
Sincethisyear,China’scrudeoilconsumptionhasalsobeengreatlyaffectedbytheepidemic,butduetotheTheepidemicpreventionandcontroleffecthasbeenobvious.Inthemiddleandlatesecondquarter,crudeoildemandhasbasicallyreturnedtopre-epidemiclevels.Fromtheperspectiveofimports,aslowoilpricesboosteddomesticcrudeoilimportdemand,thecumulativevolumeofglobalcrudeoilshipmentssenttoChinafromJanuarytoOctoberthisyearincreasedby12%year-on-year,andthecumulativedomesticcrudeoilimportvolumeincreasedby10.6%year-on-year.
Thegrowthincrudeoilimportshasalsoledtoasubstantialincreaseindomesticcrudeoilinventories.Althoughcommercialcrudeoilinventoriesatdomesticportshavedeclinedfromrecordhighsinthethirdquarter,theoveralllevelisstillmuchhigherthanthesameperiodinhistory..Affectedbytheepidemic,domesticrefinedoilconsumptionin2020isstillunsatisfactory.FromJanuarytoOctober2020,thecumulativeapparentconsumptionofrefinedoil(gasoline,diesel,andcoalcombined)reached240milliontons,ayear-on-yeardecreaseof7.2%.Amongthem,thecumulativeyear-on-yearchangesofgasoline,diesel,andkerosenewere+1.49%and-0.66%respectively.,-7.85%.Exceptforgasoline,theapparentconsumptionofdieselandkerosenestillshowednegativegrowth.
In2021,thedomesticnon-statecrudeoilimportquotawillincreaseto243millionyuan,ayear-on-yearincreaseof20%.Underlowoilprices,thereleaseofnon-statecrudeoilimportquotasin2021isexpectedtorestartimportdemand.However,thedomesticrefinedoilmarketwillstillbeaffectedbytheepidemic,andwiththefurtherexpansionofrefiningcapacity,thefutureoversupplypatternoftherefinedoilmarketwillwillintensify.
The picture shows the changes in global crude oil cargo volume sent to China
The geopolitical situation is complex. Supply pressure may increase
In recent years, the world’s crude oil supply pattern has undergone tremendous changes. The United States has surpassed Saudi Arabia and Russia to become the world’s top three oil producers. The rise of U.S. shale oil has To a certain extent, it has squeezed the market share of Middle Eastern oil-producing countries. After experiencing this round of epidemic, Middle Eastern oil-producing countries began to reduce production on a large scale. However, with the gradual recovery of oil prices, U.S. shale oil showed signs of recovery. The traditional Middle East The conflict between oil-producing countries and U.S. shale oil will reappear.
In addition, based on considerations such as political status and energy independence, even after the new US president takes office, he may not stop interfering in Middle East affairs. The United States, Saudi Arabia, Iran, Frictions between Iraq and other countries will still intensify, which will bring uncertainty to the oil market.
In addition, negotiations on the Iranian nuclear issue are expected to resume, which means that sanctions on Iran may be gradually relaxed, and Iran’s crude oil supply is also expected to return to the market. In the future, sanctions on Venezuela will There may also be a turnaround, and the overall supply pressure on the market may increase.
Taken together, the gradual put into use of vaccines in 2021 is expected to slow down the impact of the epidemic on the economy. The global economic recovery and the weakening of the US dollar are not expected to change. The overall market risk preference It will rebound further, and with OPEC+ production cuts and the recovery of crude oil demand, the global crude oil market is expected to continue to destock.
Therefore, both macro logic and crude oil supply and demand logic support the rise in the focus of oil prices. At the same time, we believe that the valuation of domestic SC crude oil is expected to increase as domestic inventory pressure eases. It will rise, thereby narrowing the price difference with external crude oil. However, the deviation between the expected effect of the vaccine after large-scale use will be the main risk point, and the uncertainty of demand may restrain the height of the rise in oil prices. </p
