Multiple factors superimposed crude oil futures plummeted for two days, will the center of gravity of oil prices move down in 2023?

　　Author: Huang Siyu

　　In the past two trading days, domestic crude oil futures and related products have continued to plummet, so why?

How will oil prices be interpreted in 2023?

　　On January 5, most of the main domestic commodity futures contracts fell, among which the main crude oil futures contracts fell the most. The crude oil 2303 contract led the decline by 5.75%, the low-sulfur fuel oil 2303 contract fell 4%, and the fuel oil 2305 contract fell 3.98% %.

These three contracts have fallen by about 8% in the past two trading days.

　　As for the reasons for the decline, many energy and chemical researchers analyzed that this is related to many factors. First, the overall recession expectation continues to strengthen; second, the market’s optimistic expectations for domestic demand have been revised; third, the decline in Russian crude oil exports is not as good as expected .

　　Another market participant said, "Because the market is generally pessimistic about the future, the heavy volume of crude oil fell in the past two days has certain short-term 'seasonal' factors. Fund managers are generally selling crude oil ETFs after the New Year's Day holiday. With negative feedback from the market, the oil price trend may fall earlier, and vice versa, it may rebound before the Spring Festival.”

　　Judging from the forecast for the whole year of 2023, the industry judges that the growth rate of demand in the global crude oil market has slowed down, and there are still differences in whether it will fall into recession.

Fuel oil, asphalt, LPG (liquefied petroleum gas) and other oil-related products will follow the trend of crude oil unilaterally, but the strength of the products will be differentiated.

　　Oil prices plummet for two consecutive days

　　Before the domestic INE crude oil futures 2303 contract plummeted, the main foreign crude oil and Brent crude oil futures contracts began to fall sharply on January 3, and continued to fall on January 4, with a cumulative decline of about 9% in two trading days.

　　The main domestic INE crude oil futures contract fell sharply on January 4th and 5th. Low-sulfur fuel oil and main fuel oil futures contracts fell more sharply. In addition, the main contracts of asphalt and LPG futures also fell to varying degrees.

　　"With the announcement of various macro data and the Federal Reserve's hawkish stance, in the short term, the market's risk appetite has deteriorated rapidly and the US dollar has strengthened, which interrupted the rebound in oil prices. If various economic data continue to fall sharply, it may continue to induce market expectations of deflation Risk concerns, oil prices may continue to give up the previous gains in the short term." Huang Liunan, a senior energy researcher at Guotai Junan Futures, told the first financial reporter.

　　Hong Xiaoqiang, head of oil products at Zheshang Futures, analyzed to the first financial reporter that there are three reasons for the recent sharp drop in crude oil. First, the overall recession expectation continues to strengthen; Russia's crude oil exports declined for two consecutive weeks, but since the third week, crude oil exports have rebounded significantly, and the shipping schedule shows that the export volume will further increase in the future.

　　On January 5, the main contracts of U.S. crude oil and Brent crude oil futures rebounded.

As of 20:00 on January 5, Beijing time, the main contracts of U.S. crude oil and Brent crude oil futures were quoted at $74.27/barrel and $79.38/barrel respectively.

　　Huang Liunan believes that from the perspective of trends, we still need to pay attention to the cyclical mismatch between the recovery of domestic delivery and the decline in overseas demand for power generation and delivery.

If there is no synchronous weakening of domestic and overseas crude oil markets, the downward drive for oil prices will be insufficient, and it is still possible to return to a restorative rebound in January.

If systemic risks arise, oil prices may end their rebound in the short term and continue to bottom out.

　　"The center of gravity of oil prices in 2023 will be lower than that in 2022"

　　The price trend of crude oil in 2022 is like a roller coaster.

Taking June 15, 2022 as the boundary, crude oil has experienced a wave of bull market in the first half of the year, and in the second half of the year, it will continue to be weak under the impact of the macro economy and China's public health incidents.

Entering 2023, what is the market's expectation for oil prices?

　　"Looking forward to 2023, the slowdown in demand growth in the global crude oil market is almost certain, and there are still differences in whether it will fall into a recession. In the face of historical inflationary pressures, the main downside risks that the market needs to face in 2023 are still similar to those in 2022, namely The risk of deflation caused by tightening liquidity." Huang Liunan said.

　　Hong Xiaoqiang believes that crude oil trading in 2023 will revolve around four main themes, namely: the progress of demand recovery after the relaxation of my country's epidemic prevention policy, the pace and depth of economic recession in Europe and the United States, changes in inflation and the pace of the central bank's withdrawal of interest rate hikes, and changes in Russian crude oil production.

In addition, factors such as the pace of U.S. SPR (Strategic Petroleum Reserve) purchases and storage, changes in OPEC production, and other factors will give additional boost to changes in oil prices.

　　"The trading logic in the first quarter will focus on the recovery of the domestic economy (from the end of the first quarter to the beginning of the second quarter), the end of the Fed's interest rate hike (expected to be the last in March), the decline in Russian crude oil production (which has already begun to decline), and the U.S. SPR purchase and storage (No. A batch of deliveries in February) several major factors, oil prices tend to rebound at a low level at this stage. However, we need to pay attention to the domestic economic recovery, the impact of factors such as the Fed’s exit from raising interest rates beyond expectations.” Hong Xiaoqiang suggested that in the first quarter, oil prices can rebound After shorting, Brent crude oil rebounded more than 90 US dollars / barrel, you can try to short.

　　In terms of oil price expectations for the whole year of 2023, Huang Liunan believes that considering OPEC's active management of the supply side, production capacity bottlenecks including OPEC+ and US shale oil, and the recovery of demand in the Asia-Pacific region after the marginal relaxation of epidemic prevention policies, the unilateral Judging the trend, I don’t think that the weak oil price will last throughout the year, but the center of gravity for the whole year is still lower than that in 2022, or there may be a drop of US$20-25/barrel.

　　Dong Dandan, chief researcher of China Securities Futures Energy and Chemical Industry, predicts that in the first half of 2023, the recovery of China's crude oil demand and the return of global aviation kerosene demand will become an upward driver of oil prices, and Brent crude oil may touch 100 US dollars per barrel; in 2023 In the second half of the year, depending on the overall situation of China and the global economy, oil prices are more likely to fluctuate in a range, and the range is estimated to be in the range of 80 to 100 US dollars per barrel.

　　"In terms of strategy, one is to buy domestic crude oil at low prices in the first half of the year; the other is to look at the price difference between inside and outside the country, and look for hedging opportunities to buy domestic crude oil and sell it abroad." Dong Dandan said.

　　So, how will the varieties associated with crude oil be deduced?

Hong Xiaoqiang believes that fuel oil, asphalt, LPG and other oil-related products will follow the trend of crude oil unilaterally, but the strength of the varieties will be differentiated. LPG is expected to perform better than crude oil, and the relationship between high and low sulfur fuel oil is expected to reverse (high Sulfur will be stronger than low sulfur in the future), asphalt has no obvious contradictions, but if it falls too much, it will show stronger resilience.