On May 19, a new round of political director-level meeting of the Joint Committee of the Joint Committee on the Joint Comprehensive Plan of Action on the Iranian Nuclear Weapon for the Resumption of Compliance Implementation Negotiations was held in Vienna, Austria. Wang Qun, China’s negotiator and permanent representative to the United Nations in Vienna, attended the meeting. Wang Qun said that the current negotiations between the United States and Iran on resuming compliance with the treaty have generally made progress, but there is still a long way to go before reaching an agreement. Relevant parties should redouble their efforts, put forward realistic and feasible suggestions on sanctions relief, nuclear field measures, and the order of resumption of compliance, and promote the formation of a comprehensive and effective plan for resumption of compliance. To this end, China also hopes that Iran and the International Atomic Energy Agency will reach relevant arrangements in a timely manner on the extension of the “Interim Bilateral Technical Understanding”.
After the meeting, the head of the Iranian delegation and Deputy Foreign Minister Araghchi said that the negotiations had made great progress and the parties had reached agreement on the main framework of the agreement, but in Differences remain on some key issues and negotiations on a draft agreement continue. Russia’s special envoy for the Iran nuclear deal negotiations said: Iran’s nuclear negotiations have made “good” or “significant” progress and an agreement is “just around the corner.”
The Iran nuclear agreement has made new progress, and international oil prices have fallen for two consecutive years
Affected by the overnight rise in international oil prices on the previous trading day, which was hindered and WTI crude oil turned sharply downward late at night, the atmosphere of crude oil varieties turned cold during the intraday session on Wednesday. The market generally dived at the opening, and continued to fall during the session. Among them, the main crude oil contract 2107 fell sharply by 2.66 %, closing at 421.2 yuan/barrel. All energy and chemical products fell. The main high-sulfur fuel oil contract 2109 plummeted 4.51% to close at 2374 yuan/ton. The main low-sulfur fuel oil contract 2108 plummeted 3.30% to close at 3110 yuan/ton. The main LPG contract 2106 continued to rise. After a day of decline, it continued to fall by 2.04%, with asphalt closing down by 2.36% to close at 3,224 yuan/ton.
Market participants said that the late-night plunge in international oil prices was mainly affected by the Iran issue. “In the early hours of yesterday morning, the BBC tweeted that Russia’s special envoy for the Iran nuclear deal negotiations said that major progress in the Iran nuclear deal negotiations was about to be announced, which triggered a rapid plunge in oil prices, with a short-term plunge of US$1.5/barrel; however, after such a toss, the market sentiment became obviously more cautious. Even slightly pessimistic, oil prices have started to adjust.” said Yang An, head of energy and chemical research and development of Haitong Futures.
“Russia’s position was misunderstood. At the beginning, everyone generally believed that the Iran negotiations had made breakthrough progress, and the return of Iranian crude oil was close at hand, causing a stampede of bulls in the session. positions, and short sellers also took advantage of the trend to go short. But later Russia stated that it was a positive development rather than a breakthrough. After the panic decline of crude oil, it recovered part of the decline.” Yu Pengsen, an analyst at Zhaojin Futures, said, in addition, since March Since the start of this round of rise in international crude oil on March 24, there has been no major correction. After hitting a high in nearly two months the day before yesterday, profit-taking by bulls is also one of the main driving factors for the market to dive lower.
“In the past two weeks, oil prices have basically maintained a narrow-range oscillation trend under the suppression of resistance. They have tried to go up several times, but the news cooperation is not ideal, and there is a lack of short-term bullishness at the supply and demand level. Morale is low. Without bullish momentum, it is difficult for oil prices to break through the previous high in March. Under this circumstance, oil prices may follow the recent cooling performance of the entire commodity market and start to adjust and seek support downwards.” Yang An said that oil prices are deep The decline may be smaller, and the possibility of later oscillations and waiting for more information guidance is greater.
In Yu Pengsen’s view, global inflation expectations are currently partially included in the price of crude oil. “Since the outbreak of the global epidemic, the economic stimulus policies introduced by various countries have been significantly weaker than the start of the crude oil rally. Of course, we have to see that crude oil also had a price war in the early stages of the epidemic, and there was a certain degree of oversold behavior. But after more than a year of operation, , crude oil is currently at a relatively reasonable position. After the price correction at the end of March, the price has returned to a rational range. Only after the economy continues to recover can the crude oil price center gradually rise. This has been reflected in the oil price trend in the past six months. OPEC+’s control of crude oil supply is effective and in line with wider expectations. The rise in international crude oil prices in the future will still require economic recovery to drive an increase in demand,” he said.
“From a macro level, countries around the world, including the United States, still regard economic recovery and employment protection as top priorities, so even if there are some signs in the market that Inflationary pressure is high and the economy is worried about overheating, but it still insists on maintaining loose liquidity to ensure that the fragile economy can recover smoothly. At the same time, various countries are still fully launching policies to stimulate economic development, which ensures strong demand for crude oil.” Yang An said that from the perspective of authoritative institutions, the recovery of global crude oil demand will further accelerate in the summer and the second half of the year, and the shortage of supply will increase the intensity of destocking. This basically ensures that the general trend of oil prices will still be to gradually increase.
Yu Pengsen also believes that the possibility of a sharp decline in international crude oil in the short term is small. “In the short term, the United States is about to enter the summer travel peak. North America, Northeast Asia, and Northwest Europe, the three major crude oil demand areas, account for nearly 60% of global consumption. The current economic conditions in these three regions are continuing to recover. Crude oil demand The possibility of another sharp decline is reduced, and the peak oil consumption season in the second and third quarters will also bring obvious support to the market.” He said that what needs to be paid attention to in the later period is the fourth quarter. At present, OPEC+ will continue to expand in the third quarter. ���It is possible to continue to increase supply by adjusting supply, and the degree of global economic recovery in the fourth quarter is still unknown, so there are certain variables in market supply and demand, and blindly bullish growth for the whole year may be problematic.
Draged by crude oil, the energy and chemical sectors all fell yesterday, with high and low sulfur fuel oil also falling in line with oil prices. However, Du Bingqin, an energy analyst at Everbright Futures, believes that the recent weak performance of high and low sulfur fuel oil fundamentals is also the reason for its lower price.
“Although low-sulfur fuel oil cargoes from the West are expected to fall to 160 in May due to weak downstream demand in the Singapore low-sulfur fuel oil market and reduced arbitrage supply from the Americas, 10,000-1.8 million tons, a significant decrease from April. However, the world’s major inventories still remain at high levels. On the demand side, Singapore’s VLSFO sales in April have bottomed out in the past few months. Due to lower prices in China, some terminal demand has increased from Singapore to Turning to China. Although high sulfur is expected to be supported by seasonal consumption of power plants, current demand growth is still relatively limited compared to the peak season. The current high and low sulfur spot discounts in the Singapore market have turned negative, and Singapore’s VLSFO is still in a light Contango structure , in an environment where supply is picking up following the start of refineries, demand lacks a significant increase, and the contradiction between oversupply and oversupply in the market is more obvious.” Du Bingqin said.
Judging from the current market trend of high-sulfur fuel oil, high volatility has become the main feature of the current market. In this regard, Du Bingqin said that the current cracking profit of high-sulfur fuel oil is low, so it is more sensitive to fluctuations in oil prices, with greater increases and decreases. “The global economy continued to recover in the first half of the year, coupled with OPEC’s maintenance of production reduction strategy, the center of gravity of international oil prices moved upward. Under the guidance of the policy of ‘carbon peaking and carbon neutrality’, the price fluctuations of energy and chemical products intensified.”
In Du Bingqin’s view, under the current global economic recovery and inflation expectations, commodity prices including crude oil have generally risen. As a downstream product of crude oil, fuel oil’s price center is expected to move up further in the future amid rising costs. </p
