China'S Train Of Thought Under "Negative Oil Price": Force And Counter Cyclical Regulation, The Second Batch Of Import Quotas Will Be Issued Two Months Ahead Of Schedule.

On the morning of 21 hours in Beijing, WTI crude oil deliveries in May fell by more than 300%, once trading at less than -40 dollars per barrel, and the final settlement price was -37.63 dollars / barrel.

For the oil industry, especially China's oil industry practitioners, the WTI5 month contract is no longer of reference significance. At present, the pricing target in the spot market has been replaced by the WTI June contract, while the Brent valuation area still uses the June contract since the month.

At the same time, the supply of crude oil spot in the United States is unlikely to soared. According to the calculation of Jin Lian, the supply of spot crude oil to the delivery link should be at 7 million 850 thousand barrels or less after the early April 21st.

Although this does not mean that the real market transaction is to trade the oil producers with the sellers, but the emergence of "negative oil price" still has enough representativeness - the pessimism about the withdrawal of demand caused by the US epidemic and the rising crude oil inventory figures.

Not only in the United States, but also in the global market, the anxiety caused by demand and inventory continues to impact the current crude oil market. Beijing time 21 at 8 o'clock in the evening, Brent oil price reported 20.72 U.S. dollars / barrel, the day fell more than 18%, obviously, last week's historic OPEC reduction agreement, did not make this already on the brink of collapse of the market to return to life.

As the world's largest source of crude oil purchasing and consumption, China's role in this cycle will largely determine the position of China in the global energy structure in the future, especially after the end of the epidemic.

"Counter cyclical" investment

As global oil prices plummeted, China, the first big buyer, naturally needs to increase its purchases at a low price.

"During the last oil price slump, China's main oil buyers were PetroChina and Sinopec, and state owned enterprises were relatively rigid in purchasing operations, so they did not have a good grasp of the last round of opportunities." An oil central enterprise told the twenty-first Century economic news reporter, "this time, China has a large number of private refineries to enter the crude oil trade, capital strength and purchasing flexibility is no longer the same."

He said that China recovered early from the haze of the new crown pneumonia epidemic, and the domestic crude oil processing volume recovered sharply in three or four months, making China the only country in the world that has a positive demand for crude oil. China is developing a unique "purchasing power".

With such power, the United States forced Saudi Arabia and other countries to accept the "oil dollar" linked to oil and the dollar, and formed the international crude oil and financial structure today.

In late April 13th, Saudi Aramco released the latest official export price of crude oil. The official price of light oil sold to Asia in May was set at 7.3 US dollars / barrel more than the Oman / Dubai average price, compared with the previous month, which expanded by 4.2 US dollars.

In fact, this can be seen as a signal released by oil producing powers. Saudi Arabia's official price will affect the official price of all oil producing countries in the Middle East. In the future, they will compete with each other in the Asian market, especially in the Chinese market.

In recent days, due to the early lock of low oil prices, the accelerated consumption of crude oil import quotas and the use of the first quota, the Ministry of Commerce officially issued the second batch of private oil import quotas in 2020, which is 2 months ahead of the previous June end of July.

"The second batch of quotas has been released for two months in advance. This is unprecedented." Zhou Guoxia, a fuel oil analyst at Jin Lian, told reporters that "under the premise of the second batch of import quotas, and the situation of domestic resumption of production and production is relatively optimistic, Chinese refineries will still expand imports during the period of low oil prices."

In the current situation, some people may think that things in the long run, some directionality, foresight, and need for strategic determination can be marginalized so that short-term actions can be prolonged. Zou Ji, President of the energy foundation, told reporters, "this may bring some chain reaction and some bad effects."

He said that in China's power sector, there has always been a "counter cyclical" investment idea, in the downlink cycle investment, in order to prepare for the next boom growth cycle, need to accelerate investment at present.

In the era of low oil prices, this idea applies to the layout and investment of renewable energy and low carbon energy in China, and also applies to domestic oil and gas enterprises. "At any time, China needs to maintain steady growth in domestic energy production." Han Xiaoping, chief information officer of China energy network, said: "oil companies need to shoulder such responsibilities to ensure China's energy security and stability."

Oil and gas enterprises still need to reform

Faced with the low oil price era, China's oil companies have made a series of statements recently.

In April 20th, the China Petroleum Group Party group held a meeting. At the meeting, Dai Houliang, chairman of the group, first stressed that under the current situation, we should conscientiously implement the spirit of the Central Committee's important instructions and conscientiously assume the responsibility of safeguarding the main force of national energy security.

"To judge how difficult the current difficult situation will be, how much more difficult and challenges will be estimated, and consider the measures more comprehensively." Dai Houliang said, "low oil prices make companies big and not strong contradictions highlight," come to an end ", according to the central requirements, and lose no time to promote further reform.

On the same day, Zhang Yuzhuo, chairman of the Sinopec group meeting, said that we need to promote production and operation in the two quarter to see improvement. We must work hard to reduce costs and reduce costs. We must firmly establish the idea of long and tight life and do well in preparing for and preparing for the changes in the external environment for a long time. Ben.

"Increasing production and production is a national strategy. From this perspective, some high costs, especially overseas high cost projects, will be affected," the central oil companies told reporters. "However, domestic energy security issues will be more fully reflected in the oil price rising cycle, and the effort to increase production and output will remain."

CNOOC also held the first meeting of the board of directors on 2020. At the meeting, the board of directors said that the board of directors should maintain strategic determination and stick to a comprehensive, dialectical and long-term view of the current situation.

In the downstream of the domestic oil industry chain, Chinese enterprises are also making some positive adjustments.

"The load of our equipment has been slightly increased," a northeast refinery official told reporters. "At the same time, in line with the group's request, we should gradually reduce the output of gasoline and turn aromatics into higher profit chemical products."

Transformation to refining and chemical integration is a trend of reform in China's refineries in recent years, and this trend is gradually strengthening during the epidemic.

In the big trend, China's foreign trade has been negatively affected by the global epidemic during the epidemic period. Economic development needs to further expand the domestic market, especially to seize various opportunities such as consumption upgrading and new infrastructure construction. At this time, more abundant, diversified and high-quality chemicals are needed, so as to promote the gradual recovery of the domestic economy.

In many petrochemical products, ethylene, as the most important intermediate material, can enjoy the benefits brought by low oil prices.

"In all ethylene industry routes, China mainly uses naphtha to make ethylene." A chemical industry personage told reporters, "on this line, the naphtha as raw material accounts for more than half of the total cost. With the continuous decline of oil prices, naphtha will also fall rapidly, and ethylene will benefit fully in this round of fluctuations."

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