OPEC Raises The Expectation Of Subsequent Crude Oil Demand, And Domestic Oil Price May Rise In The Next Round

On October 8, OPEC released its latest report. According to the report, the decline in crude oil demand caused by the outbreak of new crown pneumonia will fully recover in 2022.

It seems that in response to the release of the report, international oil prices have risen sharply in the past two trading days, reaching a new high since September. Brent and WTI oil prices rose by 3.1% and 3.2% respectively on the 8th, reaching 10% in a week. Shanghai crude oil futures rose sharply to 3.49% after the opening of Shanghai crude oil futures on the 9th, and the increase slightly fell back to 2.44% as of the press release.

"Earlier, the OPEC meeting decided to extend the cut-off period of countries that had failed to fully limit production. At the same time, Norwegian oil workers protested, leading to a decline in crude oil production." Wang Yanting, senior analyst of jinlianchuang, told reporters, "the hurricane has reduced crude oil production in the Gulf of Mexico, which has alleviated the pressure on crude oil supply to a certain extent, so the oil price has increased to a certain extent."

However, there seems to be limited room for further increases in oil prices. In terms of negative factors, the epidemic situation of new crown pneumonia is still deteriorating globally. On October 8, the World Health Organization (who) data showed that there were more than 338000 new cases of new crown confirmed cases in a single day, a new high since January 1 this year. At the same time, OPEC countries continue to reduce production and cheat, and Libya's resumption of oil production has increased market supply.

On October 9, the national development and Reform Commission announced that according to the recent changes in oil prices in the international market and in accordance with the current price formation mechanism for refined oil, the domestic gasoline and diesel prices (standard products) will not be adjusted this time.

The recent market volatility is huge

The "double holiday" just passed was not calm for the international crude oil market.

In October, Brent oil price dropped from about $42 / barrel at the end of September to $39 / barrel on October 2, and then rose to $42 / barrel on October 8. Extending the time span to one month, Brent oil price hit a low price of $39 / barrel on September 14 and October 2, respectively.

"After entering September, the international oil price has changed its previous calm and entered a relatively violent fluctuation period." A long-term observer of the crude oil market told reporters, "at present, Brent oil price has established a small double bottom structure, and the future trend is more critical. It is possible to go up or down at $40 / barrel."

He said, "in the general direction, the overall state of destocking has not changed. The market is now in a rebalancing state. The price center of gravity is moving up. At the same time, there are a lot of uncertainties. Therefore, the volatility on the end of the year will be more severe."

On the domestic side, on October 9, the reporter learned from the website of the national development and Reform Commission that domestic refined oil prices would not be adjusted. According to the calculation, the average retail price of diesel oil has not reached $50.41/barrel on the 10th day, which is equal to 10.45 yuan / barrel of crude oil.

Because the epidemic situation has been basically stable, people's travel intention increased during the National Day Mid Autumn Festival, which supported the demand for gasoline and diesel. Especially after the outbreak, private car travel increased, so gasoline consumption increased significantly during the festival.

"In the future, the benchmark price is still at a low level, but in the near future, the crude oil price shows an upward trend, and the average comprehensive crude oil price is on the high side, and the change rate will show positive fluctuation." Wang Yanting told reporters, "in the short term, the international oil price still has action power, but the increase is relatively limited, so the probability of a small increase in the new round of NDRC price adjustment is large."

Oil demand dispute

In the "global oil outlook" report released on October 8, OPEC not only believes that global crude oil demand will return to the level before the epidemic in 2022, but also believes that global crude oil demand will maintain a sustained growth for up to 20 years after the end of the epidemic.

This conclusion is in sharp contrast to the increasingly popular view of the industry.

Not long ago, BP released the 2020 edition of the BP world energy outlook. The report shows that in the next 30 years, oil demand will peak and remain stable in the first and middle of the 1920s. If the pace of global energy transformation accelerates, oil demand may never return to the level before the outbreak of new crown pneumonia.

This expectation is similar to Royal Dutch Shell Group and total. These large oil companies in Europe believe that the global future needs a stagnant period of oil demand during the transition to a clean energy structure. The proportion of crude oil in the business of these three companies is also decreasing, and the proportion of natural gas is increasing.

However, in this report, OPEC officially acknowledged for the first time in history that global crude oil demand will peak in 2040 as the energy structure, especially transportation energy structure, continues to transform to electrification.

"This judgment is actually based on different positions. There has been a big controversy over the prediction of peak oil demand." From the perspective of a large oil producer, OPEC will make a more positive judgment on its oil production capacity

However, he believes that at present, the peak oil is likely not a specific number, but a stage. "From the current technology point of view, the convenience of fossil energy is very difficult to be replaced. After oil demand reaches the peak stage, it is likely to fluctuate around this peak for a period of time."

At the same time, OPEC believes that after the end of the new crown pneumonia epidemic, OPEC will snatch back some of its lost market share from the United States and other emerging oil producing countries. By 2022, it will provide more than 34.3 million barrels / day of crude oil, an increase of 1.4 million barrels / day compared with the previous forecast; at the same time, it will increase about 10 million barrels / day compared with the output in September this year.

"Since this year's epidemic, a large number of shale oil and gas companies in the United States have been in financial difficulties, and drilling expenditures have been substantially reduced." "In the past 10 years, it is because of the activity of these oil companies that OPEC's market share has been greatly reduced," the source told reporters

The report predicts that shale oil and gas production in the United States will reach 14.5 million barrels a day by 2025, instead of the 17 million barrels previously estimated. However, these people also admitted to reporters that OPEC's expectations need to be verified by the market.

"At present, the oil price has exceeded the cost of shale oil and gas production, but there is no significant expansion of production capacity by American companies." "If the situation does not change significantly, shale oil and gas production will return part of next year. With Russia's production recovery, OPEC's expectation of increasing market share is questionable," he said

?