Demand worries will continue to drag down the weak pattern of short-term crude oil
03 January 2023
Demand worries will continue to drag down the weak pattern of short-term crude oil
Satellite news reported that on December 29th, Russian Deputy Prime Minister Novak said that the Russian authorities were ready to support Kazakhstan's oil transportation to Germany through the Druzhba pipeline.
Russian President Vladimir Putin earlier signed an order to stop the export of crude oil to countries that implement Russia's oil price ceiling from February. Dmitry Peskov, a Kremlin spokesman, said that Russia did not consult with the oil group and partner countries (OPEC+) about the directive in advance, and that it was Russia's sovereignty to respond to Western illegal acts.
Logic and opinion: The current crude oil market has not changed much, and the news is relatively calm. Crude oil prices fell in the session yesterday, but recovered before the closing, indicating that crude oil is still supported in the case of possible production reduction in Russia. However, the market's concern about future crude oil demand will continue to drag down the crude oil price, which is difficult to usher in a sustained rise. The pattern of weak crude oil will not change in the short term. It is still recommended to conduct air test at high altitude.
Liquefied Petroleum Gas
As of the week ended December 23th, EIA crude oil inventory in the United States increased by 718,000 barrels, while it is expected to decrease by 152 barrels. Travel is temporarily restricted due to the optimization of local epidemic prevention policies in Asia, and it still takes time for demand to fully recover.
The February contract of NYMEX crude oil closed at 78.40 USD/barrel, down 0.71%; ICE oil distribution contract in February closed at 82.26 USD/barrel, down 1.20%. Last night, PG02 continued to decline slightly, falling 21 points to 4234.00 RMB/ton.
In terms of domestic spot goods, only two days before the New Year's Day holiday, the refinery's pre holiday warehouse discharge and downstream replenishment channels were opened, and some high prices stimulated the downstream. The market as a whole was strong in the north and weak in the south. The center of gravity of the northern market stabilized. Recently, the price fluctuated narrowly and the price difference narrowed.
Domestic mainstream: South China 5320-5450 RMB/ton, Shanghai 4600-4700 RMB/ton, Jiangsu 5050-5300 RMB/ton, Zhejiang 4600-5000 RMB/ton, Fujian 5250-5550 RMB/ton, Shandong civil mainstream 4780-4910 RMB/ton, and C4 mainstream 5600-5700 RMB/ton.
Logic and view: The spot market is weak in the south and strong in the north. LPG futures are nearly weak but far strong. The trend of LPG is obviously weaker than that of most chemical products, mainly because the demand of LPG spot market is weak. It still takes some time to recover after opening up, and the first round of peak in major cities has passed. In the medium and long term, on the cost side, crude oil has gained strong support around US $70.00, driving the import cost further higher. At present, the landed cost is still nearly 5400RMB/ton. Although the spot is weak, this negative factor has been released in advance on the market. At present, the futures discount is still nearly 1000 RMB. At the same time, with the optimization of epidemic prevention policies, normal life is rapidly recovering in various regions. With the combination of strong demand in winter and deep discount, LPG has limited falling space, and is expected to rise after the confirmation of the bottom.
According to the latest data released by EIA, as of December 23th, the commercial crude oil inventory excluding strategic reserves in the United States increased by 718000 barrels to 419 million barrels, an increase of 0.17%; The US strategic oil reserve (SPR) inventory decreased by 3.496 million barrels to 375.1 million barrels, the lowest level since the week of December 16, 1983; The average four week supply of crude oil products in the United States was 20.832 million barrels/day, down 2.77% from the same period last year; US domestic crude oil production decreased by 100000 barrels to 12 million barrels per day.
Satellite news reported that on December 29th, Russian Deputy Prime Minister Novak said that the Russian authorities were ready to support Kazakhstan's oil transportation to Germany through the Druzhba pipeline.
Russian President Vladimir Putin earlier signed an order to stop the export of crude oil to countries that implement Russia's oil price ceiling from February. Dmitry Peskov, a Kremlin spokesman, said that Russia did not consult with the oil group and partner countries (OPEC+) about the directive in advance, and that it was Russia's sovereignty to respond to Western illegal acts.
Logic and opinion: The current crude oil market has not changed much, and the news is relatively calm. Crude oil prices fell in the session yesterday, but recovered before the closing, indicating that crude oil is still supported in the case of possible production reduction in Russia. However, the market's concern about future crude oil demand will continue to drag down the crude oil price, which is difficult to usher in a sustained rise. The pattern of weak crude oil will not change in the short term. It is still recommended to conduct air test at high altitude.
Liquefied Petroleum Gas
As of the week ended December 23th, EIA crude oil inventory in the United States increased by 718,000 barrels, while it is expected to decrease by 152 barrels. Travel is temporarily restricted due to the optimization of local epidemic prevention policies in Asia, and it still takes time for demand to fully recover.
The February contract of NYMEX crude oil closed at 78.40 USD/barrel, down 0.71%; ICE oil distribution contract in February closed at 82.26 USD/barrel, down 1.20%. Last night, PG02 continued to decline slightly, falling 21 points to 4234.00 RMB/ton.
In terms of domestic spot goods, only two days before the New Year's Day holiday, the refinery's pre holiday warehouse discharge and downstream replenishment channels were opened, and some high prices stimulated the downstream. The market as a whole was strong in the north and weak in the south. The center of gravity of the northern market stabilized. Recently, the price fluctuated narrowly and the price difference narrowed.
Domestic mainstream: South China 5320-5450 RMB/ton, Shanghai 4600-4700 RMB/ton, Jiangsu 5050-5300 RMB/ton, Zhejiang 4600-5000 RMB/ton, Fujian 5250-5550 RMB/ton, Shandong civil mainstream 4780-4910 RMB/ton, and C4 mainstream 5600-5700 RMB/ton.
Logic and view: The spot market is weak in the south and strong in the north. LPG futures are nearly weak but far strong. The trend of LPG is obviously weaker than that of most chemical products, mainly because the demand of LPG spot market is weak. It still takes some time to recover after opening up, and the first round of peak in major cities has passed. In the medium and long term, on the cost side, crude oil has gained strong support around US $70.00, driving the import cost further higher. At present, the landed cost is still nearly 5400RMB/ton. Although the spot is weak, this negative factor has been released in advance on the market. At present, the futures discount is still nearly 1000 RMB. At the same time, with the optimization of epidemic prevention policies, normal life is rapidly recovering in various regions. With the combination of strong demand in winter and deep discount, LPG has limited falling space, and is expected to rise after the confirmation of the bottom.