At the closing of the domestic futures market yesterday afternoon, the energy and chemical sector set off a rising limit trend. The main contracts of crude oil, low-sulfur fuel oil, asphalt, and PTA all closed their daily limits, with increases of 7.99%, 7.99%, 7.98%, and 6.02% respectively. High-sulfur fuel oil rose. 7.24%, LPG increased by 6.39%, and PVC increased by 4.06%.
During European stock trading, Russia’s largest bank, Sberbank, fell 95% in London, the largest single-day decline in history. Sberbank said in a statement on its website on March 2 that it had decided to withdraw from the European market. The bank’s European subsidiaries experienced abnormal capital outflows and the personal safety of some company employees was threatened, the statement said. Private equity tycoon Dan Bin lamented on Weibo: I am witnessing history again.
International oil prices have not stopped rising!
Yesterday evening, the OPEC+ alliance of oil producers led by Saudi Arabia and Russia agreed to increase oil production in April by 400,000 barrels per day in accordance with the existing plan. This OPEC+ meeting lasted only 13 minutes, breaking the record for a brief meeting last month. Boosted by this news, WTI crude oil rose 8% during the day, now trading at $111.65 per barrel, and the price rose to the highest level since 2011.
Oil prices surge at home and abroad
Yesterday, global energy prices, affected by the Russia-Ukraine conflict, continued to rise sharply, with the main contracts of WTI crude oil and Brent crude oil both exceeding the $110/barrel mark. As of the close, WTI crude oil futures rose 8.0% to US$103.41/barrel; ICE Brent crude oil May contract rose 7.1% to US$104.97/barrel. Affected by the rise in international crude oil, domestic crude oil opened higher yesterday and then hit a strong daily limit. As of yesterday afternoon, it closed at 663.9 yuan, a new high.
Liu Shuangshuang, an energy researcher at Sanli Futures, said in an interview with a reporter from Futures Daily that from the current point of view, the impact of the Russia-Ukraine conflict on crude oil has upgraded from a simple geo-risk premium to a substantial impact on its supply and demand fundamentals.
“Specifically, Russia is the world’s second largest oil exporter after Saudi Arabia and an important importer of natural gas in Europe. The first round of talks between Russia and Ukraine on March 1 did not achieve substantive results, and market risk appetite increased. , expectations for a supply shortage of crude oil and downstream oil products have become stronger. The obstruction of Russian exports has also led to a surge in transportation costs, which has also increased the cost of energy to a certain extent. In addition, the US API crude oil inventory dropped by 6.1 million barrels yesterday, and there is currently a supply shortage. Demand is strong,” Liu Shuangshuang said.
Li Yunxu, a crude oil analyst at SDIC Essence Futures, also said that although IEA member states agreed to release a total of 60 million barrels of oil reserves, the conflict between Russia and Ukraine has become increasingly tense, and expectations of restrictions on crude oil exports by the United States and Europe have continued to strengthen. The spot market has cautiously participated in Russian crude oil, and the UK Laws have been passed to completely ban all ships with any links to Russia from entering UK ports, and the supply shock continues to be felt.
From a short-term perspective, Liu Shuangshuang believes that crude oil prices are expected to remain high as global inflation continues to intensify due to short-term supply expectations and wars at the macro level.
So how long will the impact of this round of Russia-Ukraine conflict on the crude oil market last? Liu Shuangshuang analyzed that Russia and Ukraine will start the second round of talks on March 2, but it is not difficult to see that the negotiation process will be more difficult and the duration will be longer due to the escalation of sanctions from Western countries. Judging from the impact of previous wars, such as the Libyan War and the Iraq War, on crude oil, we estimate that the impact of the current Russia-Ukraine conflict will be conservatively estimated to be about half a year.
Ren Junchi, a polyester researcher at CCB Futures, said that the conflict between Russia and Ukraine has escalated significantly, and Europe and the United States have jointly announced that they will remove some Russian banks from the SWIFT system. Although the White House has since stated that it will not consider sanctioning Russia’s energy industry, considering the potential risks, the market’s acceptance of Russian crude oil has dropped significantly, and the Urals spot discount has reached a record low. In the short term, Russian crude oil exports are bound to be affected to a certain extent.
“At present, the impact of geopolitical factors on supply expectations is still the most important trading logic in the crude oil market. Under the baseline expectations, the probability of long-term large-scale impact of sanctions on crude oil exports is still relatively small. However, the multi-party game process between Russia and the United States will not be completed overnight. During this period High oil price fluctuations are still the norm, and in the later period we will focus on the possibility of a phased decline in oil prices after the Russia-Ukraine conflict and sanctions become clearer,” Li Yunxu said.
Ren Junchi said that the market outlook should pay attention to the response measures of Europe and the United States in the high oil price environment, such as accelerating the return of Iranian supply to the market and forcing OPEC+ to continue to increase production. It is expected that differences in the intensity of European and American sanctions against Russia and their implementation will significantly amplify oil price fluctuations. Investors are advised to pay attention to risk control.
Yesterday, under the strong support of cost-end crude oil, the price of low-sulfur fuel oil was also boosted and closed at the daily limit, reaching a new high since its listing. Liu Shuangshuang told reporters that as a downstream oil product of crude oil, the strong cost support has led to a geo-risk premium for low-sulfur fuel oil. The tight supply has caused the spot discount of low-sulfur fuel oil in Singapore to continue to rise. In addition, demand is supported by Japan and South Korea heating. Therefore, Low-sulfur fuel oil has been able to rise strongly. Looking forward to the market outlook, it is expected that low-sulfur fuel oil will fluctuate around the cost side and increase at high levels in the short term, so we maintain a cautious bullish view.
The chemical industry sector set off a rising trend
Driven by the surge in crude oil at home and abroad, the chemical sector products surged yesterday, among which the main contracts of PTA and asphaltAt the closing price yesterday afternoon, the daily limit was closed.
Regarding PTA, Zhou Ao, an energy researcher at Everbright Futures, told reporters that amid the recent geopolitical tensions, oil prices have performed strongly, with Brent and WTI crude oil both standing at US$110/barrel, giving PTA strong support from the cost side. In addition, the current processing fee of PTA is only about 300 yuan/ton, which is at a low level, and the valuation of PTA is not high. Therefore, the recent absolute price of PTA has followed the rise in oil prices.
In Ren Junchi’s view, the improvement in the supply and demand pattern is also one of the reasons for PTA’s late limit increase. Specifically, driven by costs, downstream speculative demand has been stimulated again, and the market has increased significantly. At present, the downstream polyester load remains at a high level, and polyester production and sales have broken through. Among them, polyester filament production and sales accounted for 134.20%, polyester staple fiber production and sales accounted for 111.98%, and polyester chip production and sales accounted for 111.69%. Generally speaking, due to the increase in PTA maintenance plans in March and the high downstream polyester load, the PTA supply and demand pattern is favorable, and there is the possibility of destocking.
Zhou Ao also said that from the perspective of PTA’s own supply and demand, due to the current poor performance of PTA, some PTA manufacturers have planned to reduce production and reduce burdens, and it is not ruled out that more devices will join the ranks of maintenance. On the PTA supply side There is shrinkage. From the demand side, the polyester load has risen to a high of around 92%, and the market is also expecting terminal textile demand in March to enter the peak season.
“Looking forward to the market outlook, some major manufacturers have announced maintenance plans for April. The market’s concerns about future PTA inventory accumulation have weakened. The actual PTA inventory accumulation in April will be lower than market expectations. The PTA supply and demand pattern is still good.” Ren Junchi said that it is expected that Under the support of cost support and downstream consumption, PTA will continue to have a strong market, which is easy to rise but difficult to fall.
Zhou Ao believes that the current direction of the geopolitical situation is still unclear, and oil prices will still maintain a trend that is easy to rise but difficult to fall in the short term. It is expected that PTA prices will still maintain a strong trend. In the future, we need to pay attention to changes in oil prices, the operation of PTA devices and terminals. Recovery of textile demand.
In terms of asphalt, Shenwan Futures Research Institute analyzed that asphalt rose sharply throughout the day following crude oil, mainly driven by the inconclusive peace talks between Russia and Ukraine, which led to the continued geopolitical conflict and the expected strengthening of infrastructure construction. At present, the asphalt market pricing has returned to domestic demand, and market bulls have gradually begun to trade the degree of fiscal expansion during the two sessions.
Shenwan Futures Research Institute stated that since late February this year, the domestic asphalt market has shown an overall downward trend. In terms of regions, except for a slight increase in North China, prices in other mainstream regions have fallen. On March 1, the average price of petroleum asphalt manufacturers in Shandong was 3,537 yuan/ton, an increase of 1.14% month-on-month and a year-on-year increase of 12.29%. Although international crude oil prices have risen sharply in recent days, the overall demand for asphalt spot prices has limited recovery, and the overall price increase has been weak and mainly maintained oscillations. In the short term, the domestic asphalt market may be dominated by consolidation and wait-and-see.
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