Late Night Heavy! OPEC+ maintains the original production increase plan, investment banks sing long, crude oil V-shaped reversal!

Late on the night of December 2, the OPEC+ producer alliance announced that it would increase production by 400,000 b/d in January as originally planned, rather than the pause expected by the market, but "OPEC+ may adjust the planned supply increase if the market changes.
"

According to the OPEC+ official website, the 23rd OPEC and non-OPEC ministerial meeting believes that under the latest development of the new crown epidemic, the market should continue to pay close attention and make immediate adjustments if needed, and the next oil production policy meeting will be held
on January 4, 2022.

Russian Deputy Prime Minister Alexander Novak said that there are many uncertainties about the impact of the Omicron variant on oil demand, and continued attention to population mobility
is needed.

The U.
S.
Department of Energy also said after the OPEC+ decision that it had no plans to change the U.
S.
plan to release oil reserves, that is, no more reserves
.

After the news was released, the main contract of Shanghai crude oil futures fell 6%, and WTI crude oil futures and Brent crude oil futures fell 4%.

But the decline lasted less than two hours, and the United States and Burundi oil turned from falling to rising in the early hours of this morning, and as of the close, WTI crude oil futures closed up 2.
75%; Brent crude futures closed up 2.
37%.

In the domestic market, as of the close of 2:30, the main contract of SC crude oil closed down 2.
11%.

It is worth noting that during the OPEC+ meeting, Iranian oil journalist Reza Zandi tweeted that if OPEC+ decides to stop the agreement to increase 400,000 b/d in January, in addition to indicating the impact of the Omicron variant and a precautionary response to future oil markets, it may also send two clear messages: First, Saudi Crown Prince bin Salman's warning to US President Joe Biden "Either recognize my status and meet with me to warm up Saudi-US relations.
" Either gasoline prices will rise further"
.
Second, Russian President Vladimir Putin's warning about Biden's possible missile deployment in Ukraine "Either an agreement is reached on Ukraine, or America's European allies will have to pay high gas prices, and gasoline prices in the United States will remain high
.
" ”

On Thursday (December 2), the second case of infection with the Omicron variant was confirmed in the United States, a patient from Minnesota who had previously attended a comic festival in New York City
.
Subsequently, a third case
of infection with the Omicron variant was detected in Colorado, USA.
Just now, 5 cases of infection with the Omicron variant have been found in New York, which means that at least 8 cases
have been confirmed in the United States.

The three major international investment banks firmly sing about crude oil

On December 2, Bank of America said in its 2022 Commodity Outlook report that inflation should support commodity prices
next year.
Strong demand, low inventories, and efforts to decarbonize the economy will all play a role
in supporting commodity prices.
Brent crude prices could hit $120 a barrel by the middle of next year, and Bank of America expects aluminum, nickel, platinum and silver to all play a role
in the transition to green energy.
Inflationary pressures are supporting commodity returns, with the energy sector expected to outperform metals and agriculture
again next year.

Citibank is also bullish on crude oil: the rebound in crude oil demand after the impact of the variant should be very strong, assuming the impact of Omicron is not large, demand growth will reach 4 million b/d in 2022; Assuming a similar impact on transport demand to last winter's Delta pandemic, demand increases by about 1.
8 million b/d
.
Total global oil demand could peak around 2029, but could peak as early as 2025
.

Goldman Sachs believes that OPEC+'s decision on Thursday to increase production as planned will not disrupt the ongoing structural bull market, and oil prices are still expected to rise
.
There are "very clear upside risks"
to the forecast for Brent crude oil to average $85 per barrel in 2023.
U.
S.
shale producers will be cautious
about spending plans for 2022 due to the recent pullback in oil prices.
At a time when shale production growth is slowing, OPEC+ spare capacity will be reduced
sooner than if the organization decides to suspend production increases.

Previously, OPEC+ had said that the release of 60.
7 million barrels of SPR would increase global supply by 1.
1 million b/d, so the global oil supply pattern in December 2021 would reverse from a shortage of 700,000 b/d to a surplus of 400,000 b/d, and the supply pattern in January 2022 would expand from a surplus of 1.
2 million b/d to 2 million b/d, so that the suspension of the established production increase plan in January 2022 is obviously a logical and consistent decision
。 From the EIA perspective, it is not surprising that global oil faced a supply shortfall of 1.
5 million b/d in December 2021 and 1.
33 million b/d in January 2022, so it is not surprising
that oil consumers, represented by the United States, urged the alliance to increase production to calm prices.

Yang An, head of energy and chemical research and development at Haitong Futures, said in an interview with a reporter from Futures Daily that before this week's OPEC+ meeting, the crude oil market fluctuated almost more than 5% in a single day, and the sharp fluctuation trend showed that investors were pessimistic and very unstable
.
The OPEC+ meeting time window is very critical, the United States and other countries to sell strategic crude oil reserves and variant Omicron put OPEC+ in passivity, oil prices plunged sharply and the next crude oil market may face the embarrassing situation of oversupply This month's OPEC+ meeting is under greater pressure
.

Yang An further analyzed: "At present, market sentiment is at a low point, and the impact of variant strains on crude oil demand still needs a period of time to have a more comprehensive assessment, and the worries brought about by this uncertainty urgently need OPEC+ to make a strong decision to calm down, which is still quite challenging for leaders such as Saudi Arabia
.
" From the atmosphere of the crude oil market in the past month or so, OPEC+'s decision to increase production in the early stage has made consumer countries very dissatisfied, which has also made the confrontation between the supply side and the consumer side of the crude oil market heating up rapidly, if the OPEC+ meeting still causes market dissatisfaction, it is likely to make investors more uneasy
.
Overall, there is still a risk
of large fluctuations in oil prices.
”

"Based on the Fed's hawkish rhetoric about accelerating debt tapering or allowing the market to continue trading bearish at the start of the tightening cycle, we continue to maintain our judgment
on the downside of oil price volatility.
" At the same time, we may see the US dollar continue to face greater upside risks, driving the center of gravity of oil prices to continue to move
downward.
Huang Liunan, senior researcher of Guotai Junan Futures Energy, said that considering that the release of SPR in the United States may not be delayed due to the recent decline in oil prices for the time being, the downside of external crude oil is still large, or there is a range
of more than $5 per barrel.
If the hedging trade of the put-on sellers of stock accelerates the price decline, the potential downside for oil prices could well exceed $5/b
.

Xinhua News Agency issued a statement: "Since December, 32 countries have cancelled China's export GSP treatment" is a misreading

Recently, an announcement by the General Administration of Customs has attracted great attention
in the industry.

"From December 1, customs will no longer issue GSP certificates
of origin for goods destined for EU member states, the United Kingdom, Canada, Turkey, Ukraine and Liechtenstein and other countries that no longer grant preferential tariff treatment to China," the announcement said.
”

Some people believe that EU member states and other countries are canceling China's most-favored-nation treatment, and some people believe that this will impact China's exports
.
What's more, "brain supplementation" has created new economic and trade frictions
.
What are the facts?

The General Administration of Customs recently issued a "Generalized System of Preferences Certificate of Origin Issuance Adjustment" explanatory that the GSP is a one-way preferential tariff treatment system granted by developed countries (preferential countries) to developing countries and regions (beneficiary countries) for the export of manufactured and semi-manufactured goods, which aims to help developing countries expand exports and accelerate their national economic growth
.
Relevant products imported from beneficiary countries will be granted tariff concessions based on MFN rates, or even "zero tariff" access treatment
.

According to Xinhua News Agency, compared with the most-favored-nation treatment, the meaning of "favor" in the GSP is stronger and more solid
.
Generally, developed economies can grant tariff treatment such as the Generalized System of Preferences to developing countries, and developing countries can also give preferential treatment
to each other.
In this treatment, the granting of preferences can be cancelled at an appropriate time according to the development situation of the beneficiary country, which is commonly referred to in the industry as "graduation"
.

It is understood that since 1978, 40 countries have successively given China GSP treatment, and with the enhancement of China's economic strength and the improvement of the competitiveness of export products, China has successively "graduated"
from the GSP treatment of various developed economies.

Xinhua reported that the European Union (including the United Kingdom, which was still part of the European Union at the time) and Turkey cancelled China's GSP treatment
on January 1, 2015.
Canada, Switzerland and Liechtenstein cancelled on July 1
, 2014.
Ukraine abolished China's GSP treatment
earlier in 2012.
In other words, the countries mentioned in this announcement have all withdrawn China's GSP treatment
several years ago.
To talk about the impact of exports, it should be a few years ago
.

However, the fact is that even after the GSP treatment is abolished, China's foreign trade has maintained steady growth
in recent years.
In the first 10 months of this year, the total value of China's foreign trade imports and exports reached 31.
67 trillion yuan, a year-on-year increase of 22.
2%, and 130 billion yuan
higher than that of the whole year of 2019.
According to Cui Fan, a professor at the University of International Business and Economics, the fact that the customs no longer issues a GSP certificate of origin is just a "technical treatment"
of the customs.

In fact, this is not the first time that the General Administration of Customs has issued a similar announcement
.
In an October announcement, the General Administration of Customs decided to no longer issue GSP certificates
of origin for goods destined for Russia, Belarus and Kazakhstan – from October 12, 2021.

The countries still granting GSP treatment to our country are Norway, New Zealand and Australia
.

It should be noted that the cancellation of GSP treatment by the above-mentioned countries is not the cancellation of MFN treatment
.
It is reported that MFN treatment is a bilateral trade partnership, which has the characteristics of mutual benefit and reciprocity in import and export trade, taxation, navigation, etc.
, while GSP treatment is a unilateral voluntary act of developed countries to developing countries and regions, and the scope of goods covered by the GSP is much
smaller than that of the MFN system.

Xinhua reported that at present, China's major trading partners, including all members of the World Trade Organization, have most-favored-nation status
relations with China.
Even if some countries impose tariffs on China in violation of WTO rules at some point, they have not reached the point of completely canceling MFN treatment
.