On Tuesday (April 26), Shanghai crude oil prices closed down 16.4 yuan, or 2.49 percent. The main contract 2206 closed at 642.1 yuan / barrel, down 16.4 yuan / barrel. Oil prices closed down, the overall remains in the shock range, the decline in the outlook for crude oil demand put pressure on oil prices, the global epidemic concerns continue to heat up, while global economic growth expectations fell, in addition, the Federal Reserve is expected to raise interest rates sharply to continue to support the dollar, these factors put pressure on the short-term trend of oil prices.
Transaction logic: The IMF lowered its global economic growth forecasts, and the release of epidemic concerns and energy reserves put pressure on oil prices. However, Russian crude oil exports are blocked, and OPEC's reluctance to increase production support oil prices. Oil prices as a whole maintain a pattern of range shocks.
From a technical point of view, oil prices remain volatile, but the current price is still running above the long-term moving average, and the main technical indicators are biased towards the bulls. Investors mainly absorb dips.
Resistance level: INE crude oil 692.0, US oil 106.46
Support: INE crude oil 610.0, US oil 93.84
China and overseas news
Global pandemic concerns are high, with a clear impact on crude oil demand
At present, the interference of the epidemic on the demand side mainly depends on the attitude of the government side, for Western countries that adopt all immunization, the interference of the epidemic on demand is limited, but for the mainland that is mainly isolated and epidemic prevention, the impact remains unchanged. The epidemic in Shanghai has lasted for more than a month and has not yet seen significant relief, in addition to Zhejiang, Anhui, Henan, Jiangsu, Beijing and other places have also been seriously disturbed by this round of epidemic. Data released by the market last week showed that China's refined oil in March was 2% lower than the same period last year, and throughput fell to its lowest level since October. China's demand for gasoline, diesel and aviation fuels in April is expected to decline 20% year-on-year.
Europe "sneaks" to buy Russian crude oil, which is not good for oil prices
Russia is the world's second largest oil exporter. After the outbreak of the Russian-Ukrainian conflict, Western countries led by the United States took the lead in "punishing" Russia, And Russia's oil exports were blocked, and international oil prices soared all the way. Recently, although the international crude oil price has declined, it is still at a high level.
The main reason for the high oil prices is the lack of oil supply. Western countries have recently punished Russia for "addiction" and reduced imports of Russian oil and gas resources regardless of their own losses, but what European countries say and do seem inconsistent.
According to US media reports on April 21, EU countries are importing more and more oil from Russia. As of now, Russia shipped 1.6 million bpd of oil by sea to EU countries in April, up 23 percent from the average daily purchase in March, according to a ship tracking agency. In March the figure was 1.3 million bpd. Some countries even doubled the amount of oil they imported from Russia in April compared to March, the media said. It is a little strange that European countries claim to reduce their dependence on Russian energy while secretly buying Russian oil.
However, oil is just needed by industry, and it is impossible without oil. Russia supplies 1/3 of the oil to EU countries every year, and now that the global energy supply is tight, European countries may not be able to find other oil suppliers for a short time, and can only continue to buy Russian oil "cheekily".
And, as long as there is demand, there will be a market. The media pointed out that in order to circumvent criticism and regulation in Western countries, a "secret market" is being formed, and by mixing with other oils, Russian oil is being transported by merchants to "unknown destinations" that oil merchants want to buy oil in this way to make a profit.
At the request of the United States, India and Japan released crude oil reserves
Recently, US President Biden claimed to release about 50 million barrels of oil reserves to alleviate the current problem of excessive oil prices, which has aroused great concern in the media around the world. After the "one order" of the United States, countries such as Japan and South Korea are preparing to release reserves of crude oil, and India is also "kneeling down" and suddenly announcing that it will follow up the coordinated plan of the global energy consumers of the United States and prepare to release about 5 million barrels of oil reserves to alleviate the problem of high oil prices.
According to the latest media reports, the United States, Japan, South Korea and India and other countries have recently accused Russia and OPEC members of "deliberately" restricting oil production, resulting in an increase in international oil prices of about 60% in the past six months, which makes the world's oil consuming countries bitter, especially because after the "big dive" in 2020, when world oil prices are raging in the new crown, THE US shale oil companies have not yet returned to the previous production capacity level, which makes the United States particularly sensitive to the rise in oil prices.
Analysts point out that India is also "struggling in pain". Unlike the United States, which can produce its own oil, India is a veritable "oil-poor country", 85% of India's oil and gas come from imports, as the world's third largest oil importer, India's oil resources mainly come from Gulf countries such as Saudi Arabia and the United Arab Emirates.
Soaring oil prices have led to a surge in inflation in the United States and India, which reached a 30-year high in October, and lowered its fuel tax earlier this month, paying a loss of Rs 60,000 crore in revenue in order to reduce inflationary pressures. India and the United States also joined forces to pressure OPEC members to increase production as soon as possible, but saudi arabia and the United Arab Emirates refused.
The release of strategic inventories has a limited impact on oil prices
At present, the crude oil inventories of the United States, Japan, Britain, France, Germany and Italy have basically remained at a low level in 5 years, while still in the destocking cycle, and low inventories will still support oil prices. In order to curb the rise in oil prices, on April 1, after the United States announced that it would release 180 million barrels of SPRs in 6 months at a rate of 1 million barrels per day, the IEA immediately announced that it would jointly release 120 million barrels of SPR with member countries, which the United States would generally bear half of the amount, and this was the third time since November 24, 2021, that strategic inventories were released to suppress oil prices. At present, the U.S. crude oil strategic inventory has fallen to the lowest level since 2002, after this round of release, the U.S. strategic reserve will approach near 300 million barrels, according to the U.S. net import accounting of 3 million barrels / day, basically close to the 90-day safety line, the later further release of strategic inventory space is limited. At present, the release of strategic petroleum reserves in the short term to solve the problem of tight supply, short-term oil prices will form a certain inhibitory effect, but the core is that the release of strategic crude oil stocks to solve only the problem of "blood transfusion", did not solve the problem of "blood supply", in the current global crude oil inventory gradually bottomed out in the process, the release of crude oil strategic inventory impact is limited.
Saudi Arabia will raise the price of crude oil exported to Asia across the board
Following Saudi Arabia's decision to lead OPEC+ production last week, Saudi Aramco's latest pricing information shows that Saudi Arabia will raise the price of crude oil exported to Asia across the board, suggesting its confidence in the economic recovery in the Asian region:
The prices of light crude oil and ultralight crude oil were raised by $0.4/b, which was $1.8/b higher than the benchmark oil price, and the increase also exceeded the survey expectations ($0.3). The price of ultra-light oil was raised by $0.2 per barrel. The prices of medium and heavy crude oil were raised by $0.5 per barrel.
Saudi Arabia's price for Asia has been higher than that for European and American markets for several months, in part because of the slower recovery in energy demand in the latter two markets.
According to OPEC+'s decision last week, oil producers will increase oil production by 350,000 bpd in May and June, respectively, and 450,000 bpd in July. Among them, Saudi Arabia will reduce the voluntary production reduction plan by 25, 35 and 400,000 barrels per day in the next 3 months. This would be tantamount to a cumulative increase of more than 2 million bpd of oil supply over the next three months, equivalent to a quarter of the current scale of OPEC+'s current production cuts.
After the decision to increase production, it raised prices in a key market in Asia, which analysts said was an attempt to appease other oil producers who wanted to increase production so that the country could maintain control of the oil industry for a longer period of time.
Institutional and analyst perspectives
Guotai Junan Futures Research Report Crude Oil: Test Support
Oil prices in the inner and outer plates fell first after the big fall in the day and then rose, recovering part of the decline. After a sustained breakout, intraday or test support maintains the shock. Trend-wise, our view remains unchanged and there is still a risk of another downside in the next two weeks. Once market expectations of a short-term escalation of the Russian-Ukrainian conflict are falsified, the disk is likely to replicate the November 2021 trend to unleash downward pressure on tighter liquidity. In particular, the European Union issued a guidance document on the 22nd, saying that "it is feasible to use rubles to pay natural gas to Russia while not violating the sanctions", which is likely to make the market short-term trading of Russian crude oil in ruble settlement once again significantly restore the bearishness of exports. Such a pullback, if triggered, is likely to rapidly lower inflation expectations and contribute to a further strengthening of real interest rates while the Fed's aggressive balance sheet reduction attitude has not changed, reinforcing the downward drive for oil prices. Therefore, after the initial release of this systemic pullback risk in recent days, the remaining trading days in April still need to be vigilant against the formation of this downward drive, and oil prices may still have room to fall in the short term.
Of course, objectively speaking, the current supply of crude oil market is still tight, and the high price of overseas natural gas and the high level of diesel cracking are the best proof. We also do not think that the average price of oil prices will fall sharply throughout the second quarter, and the probability of low inventory and low supply will remain high, and it is still necessary to guard against the upward risk of oil prices for most of the second quarter. If oil prices show a phased correction as expected in the remaining trading days of April, the trend strategy will be a potential opportunity for the second quarter to have a long one-sided and monthly positive set
South China Futures: Crude oil will remain wide in the short term
The main logic of the current oil price operation shifts from geopolitical dominance to the trade-off between the market's geopolitical risk premium and the IEA dumping and demand growth is less than expected, and the market is still in a wide range of shocks. The upward drive is mainly from the long-term low investment, low production capacity, low inventory in the oil market, and the premium brought about by geopolitical risks brought about by the Russian-Ukrainian conflict and libyan civil unrest; the downward drive mainly comes from the global economic downturn, the suppression of demand growth by high oil prices, the dumping of reserves by the United States and IEA members, the progress of the domestic epidemic, the Iranian nuclear negotiations, and whether other regions have increased imports of Russian crude oil.
On the whole, crude oil will still maintain a wide range of shocks in the short term, Brent roughly fluctuates between $95-120 / barrel, it is recommended to sell high and suck low.
Huatai Futures Crude Oil: Systemic risks have increased, and oil prices have fallen sharply
Oil prices and stocks and industrial products and other risk assets general decline, from yesterday's asset price performance, not only the stock commodities general decline, the RMB exchange rate also continued to depreciate, we believe that the main reason is from the Shanghai epidemic situation led to the market's concerns about China's economic growth, Shanghai's new infection number remains high, the drag on consumption is obvious, the current Shanghai traffic congestion index remains at a historical low, the market's expectations for China's demand growth continue to decline, which is the biggest bearish in the current oil market In addition, the agenda of the Iranian nuclear agreement is expected to resume again, which will also disturb the market, but the process of reaching the Iranian nuclear agreement is tortuous and complicated, and we do not think it will be reached in the short term.
This article originated from Huitong Network