Crude oil is back in the rising tide

The impact of the Russia-Ukraine conflict continues to ferment, the energy crisis has intensified, oil prices have taken the lead, and market volatility has intensified
.

The market is worried that the United States and the European Union may restrict Russian crude oil exports, and the risk of supply disruption in the global crude oil market has increased
sharply.
Brent and WTI crude oil prices both hit their highest levels since July 2008 yesterday, rising to $139.
13/b and $130.
50/b
respectively.
Affected by this, the average price of gasoline in the United States rose 11% in a week, breaking through $4 per gallon
.
As of the close of trading in the early hours of today's morning, Brent crude oil closed up 4.
3% at $123.
21 / barrel; WTI crude closed up 3.
2% at $119.
40 a barrel;

Analysts believe that Russia is the world's second largest crude oil producer, with an output of about 11 million barrels per day and an export volume of about 5 million barrels per day, which is difficult to make up
for in the short term after such a large number of exports are restricted.

The market is worried about the escalation of sanctions against Russia, and on the morning of March 7, it was reported that Pelosi, speaker of the US House of Representatives, sent a letter to lawmakers saying that the House of Representatives is currently considering a "strong bill" to further separate Russia from the global economy
.
The bill would ban the import of Russian oil and energy products to the United States and cancel normal trade relations
with Russia and Belarus.
The bill would also take the first step in denying Russia access to the World Trade Organization and would also authorize the U.
S.
government to raise tariffs
on Russian imports.
The market panic caused by Russian sanctions will also go further
.

"At present, the sanctions have had a real impact on the supply side of crude oil, and some buyers are afraid to buy because they are worried about the sanctions, and some of them want to buy but can't
.
" According to feedback from the market, some buyers have already encountered difficulties in payment and the supply of vessels, and some banks have stopped issuing letters
of credit for refineries that buy Russian crude oil.
Correspondingly, we see Russia's Urals crude oil discount Brent spot reaching $20-30 / barrel
.
Guohai Liangshi futures researcher Zhang Zhengze said
.

Market panic has driven oil prices to continue to soar, and from the cost side, it has strongly driven crude oil varieties to "dance"
together.

On Monday, the intraday crude oil system followed the international oil price rally like a rainbow, SC crude oil, high-sulfur fuel oil, asphalt main force, low-sulfur fuel oil, PTA main contracts have touched the limit of the limit, the end of the session closed the limit, LPG, methanol main contract soared more than 6%.

"The current oil price trend is a mirror reaction of the oil price trend during the epidemic in 2020, how pessimistic the price was then, how crazy the mood is now, but the damage of high prices to substantive demand will not be absent, only late
.
" Zhong Meiyan, director of Everbright Futures Energy, said that for the industry, high costs have brought great damage to the resilience of the industrial chain, and product profits have turned from positive to negative, and once the vulnerability of the industrial chain breaks out, it will lead to a larger area of shutdown and production
stoppage.
At present, the chemical industry is trading a rising cost, and the price center has moved up, but due to different varieties, there is also a large difference
in the current round of increase.

In the view of Pang Chunyan, an analyst at SDIC Anxin Futures, the current market rhythm is mainly in the energy sector, and the absolute price of downstream products is still dominated by oil prices, but profits may continue to be squeezed
.
"Oil prices are rapidly rising under geopolitical factors, and it is difficult to grasp the rhythm of the future market from fundamental analysis, once oil prices turn around, under the double negative of weakening costs and declining demand, chemicals may have a round of obvious adjustments
.
"

The price center of gravity of oil-based varieties has shifted upward

The price of crude oil on the outer disk dominates the movement
of the oilchemical system in the inner disk.
Crude oil soared yesterday, with strong prices for asphalt, LPG and fuel oil
.

In Zhang Zhengze's view, crude oil is more about raising the production cost of downstream oil-based varieties and then reducing their supply to affect the price of
downstream oil-based varieties.

Taking styrene as an example, driven by the cost of crude oil, the production cost of styrene integrated equipment continues to rise, and the oil price is denominated at 120 US dollars / barrel, and the production cost of styrene integrated equipment will come to 11,000 yuan / ton
.
The transmission of styrene prices to the downstream lags behind, resulting in the compression of production profits, resulting in a decline in operating rates, and finally from the impact of the cost side to the direct impact of its supply and demand side, driving up prices
.

The Futures Daily reporter learned that at present, the core factor leading oilchemicals is the sharp rise in crude oil on the cost side, but the situation of the supply and demand side of each variety is different, resulting in different
strengths.

"In this round of the rise of the oilchemical system, the overall rise of asphalt is small, from a more intuitive inventory point of view, due to the current poor demand situation, supply scheduling beyond expectations, the total inventory of asphalt plant inventory plus social warehouse is at the same high level of the same period of the year, super seasonal accumulation, in this poor supply and demand situation, the price is more with the rise of the cost side of the entire plate and upward, its own supply and demand drive is limited
.
" Zhang Zhengze said
.

"Relatively speaking, LPG also rose less
.
The reason is that LPG enters the off-season of civilian demand, while the loss of PDH equipment increases, the operating rate is expected to decline, the marginal demand for chemical industry is weakened, and LPG civil and chemical demand is weakened
.
Therefore, LPG, as a weaker variety in the fundamentals of the oilchemical system, has a relatively small
increase.
South China Futures energy analyst Liu Shunchang said
.

"At present, market trading is no longer a factor in the fundamentals of crude oil itself, but whether the war situation expands and sanctions expand, so oil price fluctuations will be greatly amplified
.
" Zhong Meiyan said that the future market of oil-based varieties is more worried about the carrying capacity
of the demand side.
"From the current domestic macro policy, there are stable expectations, and the policy force point is also stabilizing demand
.
" However, due to the large fluctuations in raw material prices, profits in the industrial chain are concentrated at the upstream end, and the crowding out effect of high prices on demand will gradually become clear
.
From the demand side, the price increase lacks sustainability
.
”

In fact, the demand side of various oleochemical varieties has also diverged.

"Up to now, the demand side of asphalt has not improved significantly, the demand for styrene has maintained a seasonal increase, and the downstream operating loads such as EPS, ABS, PS, etc.
are at a seasonal high; The downstream traditional civil demand of LPG has gradually entered the seasonal off-season, but industrial demand, such as C4 downstream alkylation and MTBE demand, has significantly increased
the operating rate due to the repair of the profit of the previous installation.
Zhang Zhengze said that after the price reaches a relatively high level, it is necessary to pay attention to the basis of each variety, downstream profits and whether there will be negative feedback downstream
.

Interviewees generally believe that the future trend of the oil-chemical system still depends on the cost side - the "face"
of crude oil.

"Considering the uncertainty of the political game, if the final outcome of the Iranian nuclear negotiations is not smooth and Saudi Arabia fails to significantly increase production, oil prices will continue to rise sharply, and the rebalancing of the crude oil market at this time will be achieved
by negative feedback on economic growth and a squeeze on consumption after oil prices continue to rise sharply.
" Liu Shunchang said that the current Brent flat option volatility rose to around 120% in May, a new high since the epidemic in 2020, and crude oil volatility continues to increase, so risk control
needs to be paid attention to.

Similarly, Zhang Zhengze also believes that in the case of rising oil prices and raising the cost of oilchemicals, it is also necessary to pay attention to some possible reverse signals to prevent huge fluctuations
after soaring.

Polyester "three brothers" dance wildly, cost pressure is worrying

Driven by the sharp rise in costs, the entire oilchemical sector has risen sharply, and the polyester sector is no exception
.
Subdivided, yesterday, the PTA performance of pure oil head was the strongest, and it rose and stopped in the afternoon; Ethylene glycol followed, with an increase of more than 5%, and the downstream staple fiber rose behind
the raw material.

On Monday, the PTA repeatedly touched the upper limit, and the strongest performance in the polyester sector was mainly due to its own strong
fundamentals.

According to Zhu Lihang, an analyst at Zhejiang Futures, the PTA supply side had a large number of equipment maintenance in March and April, superimposed downstream polyester to maintain a high start, PTA as a whole in the rhythm of destocking, supply and demand pattern is better
.
Compared with ethylene glycol and staple fiber, PTA has no pressure to add new production capacity in the short term, and the production capacity pattern is constantly optimized
as the downstream continues to put into production.
"Now that PTA processing fees are at a low level, the overall valuation level is low, and there are good supply and demand expectations, it is reasonable to perform
strongly.
"

"Ethylene glycol is a deeply loss-making product, and the production of overseas equipment has been reduced more, so it may greatly affect the import volume; However, some of the oil-making units in the domestic production have been converted to production, large-scale production cuts are still on the way, the coal-based route is currently starting well, and some of the installations have annual maintenance arrangements
.
Pang Chunyan said that overall, under the double benefit of production reduction and soaring raw materials, ethylene glycol has reversed the pattern of continued weakness, but the recovery drive of profits has not yet appeared, and port inventories are still rising
.
As a downstream product of PTA and MEG, staple fiber is closer to terminal consumption, and in the context of current weak consumption, the price of staple fiber is weak, so in the case of a sharp rise in raw materials, the profit of short fiber is passively squeezed
.

In Pang Chunyan's view, the closer the entire industrial chain is to the raw materials of upstream crude oil, the stronger the performance, and the closer it is to the consumer side, the weaker
the performance.
Profits are concentrated in upstream crude oil and naphtha, PX, ethylene and downstream chemicals fall into a comprehensive loss situation, and the loss is intensifying with the strong rise of raw materials, and the profit of polyester products is also being squeezed
.

With the sharp increase in the price of raw materials and the increase in polyester varieties, the profits of various varieties of polyester have shown obvious compression
.
Except for DTY, filament shows a loss of 200-400 yuan / ton, and the cash flow of staple fiber is also in a loss, and the cash flow of bottle flakes can still maintain high profits
.

During the interview, the reporter learned that the strong cost and weak demand have become an important contradiction point
in the current polyester market.
According to Jiang Shuopeng, an analyst at Dadi Futures, after entering March, the downstream demand side of polyester is still relatively weak, weaker than expected
.
At present, terminal orders are still weak, only a small number of domestic summer new orders, large quantities have not been conducted, and foreign orders have not improved significantly
.

"In March, in the process of rising oil prices, polyester factories staged promotion, there were also days of individual production and sales, but the overall willingness to chase the downstream is not strong, the industrial chain inventory is still backlogged in the polyester link, although now polyester and downstream operating rate basically restored to a high level, but the terminal orders are weak, resulting in the cost transmission of the industrial chain is blocked
.
" 。 Pang Chunyan said that the upstream and downstream of the industrial chain is in a state of serious tearing, although product prices are rising under the impetus of cost, but the terminal is difficult to accept high prices may in turn restrict upstream production, such as the continuous rise of polyester factory inventories, forced to reduce production, will have a negative impact on
raw materials.

In Jiang Shuopeng's view, the current terminal performance remains weak, polyester links maintain high inventory and low profits, industrial chain inventory transfer is still slow, if the cost side rises are excluded, the polyester industry chain price continues to rise support momentum or relatively limited
.

"At this stage, polyester prices are still mainly following oil price fluctuations, and the impact on supply and demand is relatively limited
.
If oil prices stabilize in the future, on the one hand, we must pay attention to whether the downstream polyester can maintain a high start, on the other hand, we must pay attention to the landing of the news of
the maintenance on the supply side.
Zhu Lihang said
.