International oil prices soared at night Market participants: It is expected that the crude oil price operation center will move down compared with 2022

On the night of January 9, international oil prices rose
sharply.
WTI crude oil rose 4.
00% intraday, and Brent crude rose more than 3%
intraday.

Chen Tong, an analyst at Yide Futures, told reporters that the decline in Russian supply and the evolution of Chinese demand this year will be a key factor
in determining the balance sheet of the crude oil market.
Russia's continued oil sales using new means of transport, new insurance mechanisms, new trade methods, etc.
can mitigate the impact of Western restrictions, but it is estimated that the negative impact
will not be fully offset.
With the continuous increase of stable growth policies and the optimization of epidemic prevention and control policies, China's economic development is expected to improve, and the demand for gasoline, aviation kerosene and other oil products linked to residents' travel is expected to contribute to an ultra-seasonal increase
.
Under the benchmark scenario, global oil supply and demand will show a tight balance in 2023, but the crude oil price operation center will move down from 2022, mainly because the deviation of inventory levels from the five-year average has narrowed significantly, and it is expected that the probability of crude oil prices fluctuating in the range of 80-100 US dollars / barrel is large
.

At the macro level, the Fed raised its forecast for next year's peak interest rate to more than 5%, and no officials believe it will cut interest rates in 2023, exceeding market expectations
.
In addition, the ECB said that there are still upside risks to inflation, and it is expected to raise interest rates by 50 basis points more than once in the future; The Bank of England has also shown that even if the economy will recession next year, the interest rate hike to control inflation will not stop
.

In this regard, Chen Tong said that the continued monetary tightening policy of Western central banks has not only increased the downward pressure on the economy, but also intensified the market's concern
that the economies of OECD countries such as the United States and Europe will fall into recession.
The current 10Y-2Y (10-year minus 2-year), 10Y-1Y and 10Y-3M yields are fully inverted, suggesting that the risk of recession in the US is actually rising
rapidly.
The preliminary Markit manufacturing PMI in the United States recorded 46.
2 in December, a new low in nearly 31 months, and the second consecutive month below the "boom and bust line
".
The Eurozone manufacturing PMI recorded 47.
8 in December, which has been below the "boom and bust line" for six consecutive months
.
The International Energy Agency expects diesel demand in OECD countries to decrease by 210,000 b/d in 2023, dragging overall oil demand growth to 39 b/d, a sharp slowdown
from 1.
3 million b/d in 2022.

It is worth noting that unlike OECD countries that are at or near recession, non-OECD countries such as China and India are expected to have relatively good economic conditions in 2023 and show a moderate recovery
.
The IMF expects real GDP growth in China and India to reach 4.
6% and 6.
1% respectively in 2023, leading major economies
.

Specifically, China's official manufacturing PMI recorded 48 in November, still below the boom and bust line
.
With the continuous increase of stable growth policies and the optimization of epidemic prevention and control policies, China's economic development is expected to improve, and the demand for gasoline, aviation kerosene and other oil products linked to residents' travel is expected to contribute to ultra-seasonal increments
.
Since June 2022, the Indian government has raised export taxes on diesel, gasoline and jet fuel, and imposed "windfall profits taxes" on some oil companies to restrict exports and safeguard domestic market supply
.
The intervention of the Indian government has kept domestic fuel prices relatively stable, while diesel prices in the United States and China have risen by 50% and 14%
respectively.
In addition, India's economic growth remains strong, with the final manufacturing PMI rising to 55.
7 in November from 55.
3 in October, and new orders are also growing rapidly
.
India's fuel consumption rose 10.
2 percent year-on-year in November, climbing to an eight-month high
, according to oil ministry data.

"It should be pointed out that due to the economic downturn and the pressure of the epidemic shock, China's oil demand may appear in the first quarter of 2023 may be a 'darkest moment', and there will be a significant recovery
in the second quarter.
" The IEA expects China's oil demand growth to reach +818,000 b/d in 2023, compared to -418,000 b/d
in 2022.
Although India's oil demand growth may slow down next year due to factors such as insufficient demand in overseas markets and high interest rates, it will continue to see higher consumption figures
.
The IEA expects India's oil demand to grow by +191,000 b/d in 2023, compared to +386,000 b/d
in 2022.
Chen Tong said
.

In terms of Russian crude oil, it is reported that in addition to a series of EU sanctions against Russian oil, the US government has also increased the crackdown on brokerage companies and traders forging invoices and transaction information, and at the same time monitoring
the whole process of transactions.
Among them, the focus is on preventing refiners from buying Russian oil at nominal low prices, but subsidizing Russian oil companies in the form of rebates, so that the actual import price of oil is higher than the ceiling price
.
The U.
S.
Treasury Department also highlighted the need to rigorously investigate the entrepot trade of Russian oil, which should only be exempted
if it undergoes a major transformation in another country or jurisdiction, such as when it is processed into a new product.
Simply blending Russian crude oil with crude from other foreign sources is not a major shift
.

In this regard, Chen Tong believes that in the short term, Western sanctions will have a significant adverse impact on the production and export of Russian oil, and Russia is also trying to overcome sanctions restrictions due to the situation, and the game between the two sides around oil is far from over
.
"Since the beginning of 2022, Russia has purchased more than 100 tankers to supply oil to India, China and Turkey, including about 30 supertankers
.
Previously, a number of public reports showed that Russia has been exporting to Europe through 'gray space' for the past six months, for example, shipping Russian oil to refineries in Italy, Bulgaria and Romania through third-party vessels, and after refining at these local refineries, it is sold to the European market; Or through blending and other means, the source is obscured, so that Russian oil appears in the European market
in disguise as a blended oil.
”