中文
Driven by the expectation of resuming production after the voluntary reduction of OPEC+production,international crude oil prices continued to decline from early July until mid September when they stopped falling and rebounded.In the first week of October,the geopolitical crisis in the Middle East escalated,and international crude oil prices rose sharply,but did not return to the high point set in July.As of the close on October 8th,the November contract of NYMEX WTI crude oil futures has rebounded 14.2%from the low set on September 10th.
So,will the rise in crude oil prices continue?Looking ahead to the future,the impact risk of geopolitical crises on the supply side has not dissipated,and OPEC+resumption activities have not yet been launched;On the demand side,the US economy is slowing down but still has resilience,and there is no risk of stalling yet.Therefore,international crude oil prices may remain firm in the short to medium term,and the downside risk in the future comes from the economic recession in Europe and America.However,China’s economic growth will partially hedge this risk to some extent.
Supply:Short term expected reduction
Firstly,as the geopolitical crisis escalates,there is significant uncertainty in the production of crude oil in the Middle East.On October 1st,Israel announced ground strikes against Hezbollah targets in southern Lebanon;On October 2nd,Israel launched airstrikes on the Gaza Strip and Syria in Palestine.In response to Israel’s recent actions,Iran launched a large-scale ballistic missile attack on Israel on the evening of October 1st.The conflict between Israel and Hezbollah in Lebanon has escalated rapidly,involving more countries and posing a risk of triggering a war in the entire Middle East region.
Israel’s retaliatory actions against Iran are a key factor in the volatility of the crude oil market and could lead to two possible outcomes:
The first possibility is that Israel may launch attacks against Iranian military targets and nuclear energy,or trigger a larger conflict,and Iran may retaliate by closing important trade routes in the Strait of Hormuz.Data shows that the total global crude oil exports by sea are approximately 45 million barrels per day,of which 13 million barrels per day flow out of the Persian Gulf through the Strait of Hormuz.At present,about 17 million barrels of crude oil pass through the Strait of Hormuz every day.Although some crude oil can be diverted by sea,such as bypassing the Strait of Hormuz through oil pipelines,it is difficult to replace the massive scale of sea transportation.Saudi Arabia can partially bypass the strait through the East West oil pipeline,with a capacity of 5 million barrels per day.However,Saudi Arabia exports 6.2 million barrels of crude oil per day through the Strait of Hormuz,which means there are still 1.2 million barrels per day that cannot be exported.The United Arab Emirates can bypass the transportation route of the Strait of Hormuz through the Abu Dhabi crude oil pipeline,but the daily transportation volume of the Abu Dhabi crude oil pipeline is only 1.5 million barrels,accounting for only 50%of its export volume.Other oil exporting countries,such as Kuwait,Qatar,and Iraq,currently do not operate large cross-border pipelines to any ports.Therefore,if the Strait of Hormuz becomes impassable,they will face a problem of 5.5 million barrels per day of crude oil exports.Once the Strait of Hormuz is closed,there will be a significant gap in the global crude oil market,especially for countries and regions such as Europe and Asia that require a large amount of imported crude oil,which will face severe supply shortages.
The second possibility is to launch attacks solely on Iran’s oil and gas infrastructure.Based on historical experience,unless Iran’s extraction equipment is completely destroyed or its oil pipelines are blown up,the impact on its crude oil production will be minimal,and the oil pipelines will be repaired quickly,so the impact on crude oil supply will be minimal.
Secondly,after ending the voluntary production reduction agreement,OPEC+has not yet initiated any production increase actions.On October 2nd,the OPEC+Joint Ministerial Meeting continued the resolution of the previous meeting,which stated that starting from December,OPEC+will increase production by 180000 barrels per day per month.However,based on OPEC’s production,there has been no increase in August and September.The data released by OPEC shows that in August,OPEC crude oil production decreased both year-on-year and month on month,falling to 26.588 million barrels per day,a 3.3%decrease from the same period last year,and the decline has expanded compared to July.The reduction in production mainly comes from Saudi Arabia,Iraq,and Libya,with Libya’s crude oil production in August significantly decreasing by 219000 barrels per day compared to July.The survey results show that in September,OPEC’s daily crude oil production decreased by 480000 barrels to 26.61 million barrels,with Libya experiencing the largest decline in crude oil production.Previously,the eastern government of the country suspended exports to compete for control of the central bank.
Once again,there is not much room for growth in US crude oil production.According to data released by Baker Hughes,the number of oil drilling rigs in the United States decreased significantly in the week of October 4th,to 479,lower than the record of 480 in August and September.In September,the crude oil production in the United States fluctuated between 13.2 million and 13.3 million barrels per day,higher than the level of 12.9 million barrels per day in the same period last year,but did not reach a new high.
Finally,South America is currently the main source of global crude oil supply growth,but there are many disruptive factors.The latest data shows that Brazil’s crude oil and condensate production increased by 7%from April to June,ending a continuous downward trend for five months.However,due to the shutdown and maintenance of major oil fields,the growth rate of crude oil production in Guyana slowed down in the third quarter.
Requirement:There will be no significant decline temporarily
As the world’s largest oil consumer,although the US economy has slowed down,it still maintains resilience.The United States consumes 19.14 million barrels of crude oil per day,and its commercial crude oil inventories continued to decline in September,indicating that US crude oil consumption remains strong.Data shows that as of September 27th,commercial crude oil inventories in the United States have dropped to 417 million barrels,reaching a high of 460 million barrels in June and 414 million barrels in the same period last year.
As the world’s second-largest consumer of crude oil,China consumes approximately 14.29 million barrels per day.With the implementation of various positive policies in the fourth quarter,economic growth will increase and crude oil consumption will also experience a recovery growth.In August,China’s crude oil imports decreased by 7%year-on-year,and it is expected that the decline in September will be reduced.From the perspective of the operating rate of local refineries in Shandong,it rebounded in September and rebounded to 53.54%as of September 26,before dropping to 48.38%in August.
In summary,there is a risk of a reduction in global crude oil supply due to the escalation of the geopolitical crisis in the Middle East.On the demand side,the unexpected increase in US non farm employment in September indicates the resilience of the US economy,and the demand for crude oil continues to grow rapidly.There is a high probability that China’s crude oil demand will rebound in the fourth quarter,thereby easing the pressure of crude oil surplus,and there is a risk of price increase.
From the perspective of trading strategy,due to the fact that geopolitical crises often bring short-term,rapid,and fast market trends,tools to hedge against the risk of rising oil prices should be timely and efficient.Investors can use the WTI crude oil weekly option contract under Zhishang Exchange to hedge risks or capture returns,such as buying WTI crude oil weekly call option contracts.Data shows that the crude oil futures and options market has strong liquidity and active trading.On October 1st,due to the escalation of geopolitical crisis,crude oil prices skyrocketed.The daily trading volume and holdings of WTI crude oil options reached a historic high,with trading volume exceeding 50000 and holdings exceeding 72000.