Kansas City Fed President George said on Thursday that although the Delta variant of the new coronavirus still poses a threat to the U.S. economic prospects and job growth, the U.S. government should still take action and reduce bond purchases. St. Louis Fed President James Bullard also said on Thursday that the Fed should start reducing its bond purchases. He expects the Fed to end its bond-buying program in the first quarter of 2022.
At 22:00 on August 27, Beijing time, the 2021 Jackson Hole Global Central Bank Annual Meeting will enter the second day, and Federal Reserve Chairman Powell will deliver a speech.
International oil prices ended three consecutive positive days
Yesterday, Brent Crude oil and WTI crude oil ended their previous three consecutive gains and fell slightly. It is understood that U.S. crude oil inventories fell for the third consecutive week last week, while overall fuel demand rose to the highest level since March 2020. This directly boosted oil prices, with a cumulative increase of about 10% in three days. However, the spread of the Delta strain around the world still suppresses demand for crude oil, and oil prices have retreated after rising higher.
“The strong rebound of international crude oil in the past few days was due to a fire on an offshore oil platform in Mexico, which had a short-term impact on the oil market; on the other hand, it was due to the decline of the US dollar index. and other favorable factors to boost.” Liu Jiao, an analyst at Huishang Futures Research Institute, said that after three consecutive positive events, oil prices weakened slightly on August 26. Judging from the current market conditions, the epidemic continues to suppress crude oil demand. The market’s concerns about demand recovery have rekindled, which will undoubtedly suppress oil prices. Short-term stimulation is difficult to support the continued strength of oil prices.
In the view of Zhaojin Futures Energy Analyst Yu Pengsen, from a fundamental perspective, although demand is still far behind the generally optimistic expectations in the early stage, the actual recovery has not been achieved. It is expected, but there is still an expectation of destocking before the end of the year. OPEC+ production restrictions still exist, which has provided support to the market as a whole. However, it should be noted that the market sentiment has changed after this round of oscillation callback.
As one of the most important uncertainties, the spread of the Delta strain of the new coronavirus around the world has made it difficult to completely eliminate market concerns about slowing demand in the short term. Many countries have strictly enforced The impact of prevention and control policies on global demand growth continues. Liu Jiao believes that for now, this is still an uncertain factor. If the epidemic can be effectively controlled, market concerns may be alleviated. The market is currently more boosted by short-term positive news on the supply side. Whether the trend of crude oil can reverse remains to be seen.
“Since the beginning of the year, the oil market has been generally concerned about issues, mainly due to expectations: First, it is expected that the summer oil consumption peak will have a significant boost to the market. Second, it is expected that OPEC will continue to Restricting production will cause a serious shortage of supply in the market. Third, with the vaccination, the impact of the epidemic on the market is expected to weaken. But after July, the market pays more attention to the reality. From the actual situation, although the market The recovery continues, but it does not meet expectations. The vaccination work is progressing slowly, the epidemic continues to recur in Europe and the United States, and the impact on the economy is also obvious. The summer travel peak in the United States did not bring more optimistic results, and OPEC There are also internal differences, and supply has increased more than expected.” Yu Pengsen said that based on the above judgment, before the fourth quarter comes, after trading expectations, the market will have to return to the reality that it is still weak, and bullish and bearish formations will occur. Market contradictions.
Liu Jiao also believes that the current market is paying more attention to the demand outlook, and the benefits on the supply side are only short-term and are not enough to support the continuous rise in oil prices. “In this round of rising oil prices, we still need to remain cautious. The important statements of the Federal Reserve this Friday and the OPEC meeting next week may have an impact on market sentiment. Uncertainty factors are increasing, and short-term international oil prices may fluctuate sharply. This is the norm. The market resonates with long and short prices. When crude oil can open its upward channel, we still have to wait for the recovery of the demand side,” she said.
“Judging from the current trend, the U.S. summer travel peak has reached the end, and there are no more optimistic expectations to stimulate the rise of oil prices in the mid-term. The high point of the year may have already appeared in July. , it is extremely difficult to break through upward.” Yu Pengsen believes that for the market outlook, as the contradiction between reality and expectations continues to ferment, the oil price is more likely to fall into a wide oscillation. Due to the production restrictions of OPEC+, the increase in supply is limited. Yes, there is no basis for oil prices to fall sharply below $50/barrel, and OPEC+ still has effective control over oil prices. However, oil prices have also lost the possibility of breaking through the previous high, and the short-term market will oscillate or even trend downward due to the influence of various news.
The overall sentiment of the chemical sector is weak
The overall atmosphere of the chemical sector on Thursday Not good, polyolefin prices both fell, with the main contract of PP falling by more than 2.8% and the main contract of plastics falling by more than 2%. Since mid-August, the overall center of gravity of the polyolefin sector has been sinking. PP has experienced a relatively large decline, while plastics have been slightly resilient. The price difference between the two has narrowed, and market trading has been cautious at the end of the month.
In the view of Everbright Futures analyst Zhou Ao, the overall performance of the chemical sector is weak. On the one hand, a considerable number of chemical products are facing pressure from new production capacity in the second half of the year; on the other hand, On the one hand, due to the impact of the epidemic, domestic consumption is still weak, while exports have been affected by rising sea freight and lengthened logistics cycles, and many overseas orders have been placed in advance.�As the “Golden Nine and Silver Ten” are approaching, the demand for chemical products may be faced by residents who are not strong in the peak season. Generally speaking, under the weak supply and demand situation, it is difficult to expect the price of chemical products to strengthen.
In addition, it should be noted that the current supply and demand of polyolefin varieties is relatively weak. According to Zhou Ao, new polyolefin production capacity was intensively launched in August, and new supply will be gradually released in September. At the same time, polyolefin device maintenance is limited in September. Overall, polyolefin supply pressure is gradually increasing. From the demand side, it is difficult to improve the start-up of PP downstream plastic weaving, injection molding and other industries. Enterprise orders are average and there is no sign of improvement for the time being. Under the sluggish market, downstream purchasing mentality is cautious. In addition to the PE downstream orders for agricultural film being acceptable and agricultural film production starting to gradually pick up, most other downstream industries have started operations weaker than in previous years. Enterprises mainly purchase on demand and have limited support for the raw material market.
“In addition, BOPP factories are waiting for a new round of replenishment cycles. Most of the current film factory production schedules are until the end of August, and some are until mid-to-early September. The downturn in polyolefin prices has caused downstream The industry is more cautious and wait-and-see, and the market is paying attention to whether the traditional peak season prices of the ‘Golden Nine and Silver Ten’ can be fulfilled.” Zhou Ao said.
It is understood that the center of gravity of international oil prices has increased slightly recently, but it is still at a high level, and the overall guidance for the chemical market is not strong. Zhou Ao said that polyolefin is a variety that accounts for a large proportion of the production capacity of oil-based processes. When oil prices strengthen and the supply and demand of polyolefin itself is weak, its processing profits are compressed, and the sensitivity to raw material prices increases. The absolute price of polyolefins The linkage with raw material price trends will be enhanced. Similarly, when oil prices weaken and the supply and demand of polyolefins themselves also weaken, the absolute price of polyolefins will show a downward trend under the combined effect of the supply and demand side and the cost side.
“From the perspective of August, polyolefin prices continued to oscillate sideways, with long and short factors intertwined, the contradiction between supply and demand was not obvious, and the price fluctuations were not large. However, new prices began to increase in September Production capacity continues to be released, and with the resumption of maintenance equipment, supply is expected to increase significantly, but there is no sign of improvement on the demand side. It is expected that the overall supply and demand situation of polyolefin will become looser in September, and prices will face certain pressure.” Zhou Ao said. </p
