On December 13, as the “OPEC +” oil-producing countries increased their output reductions in the first quarter of 2020, and the demand for crude oil ushered in the peak season of consumption, the stocks peaked and fell into the dechemicalization cycle, which helped boost the willingness of crude oil bulls to increase . Recently, domestic and foreign crude oil futures have been under a strong atmosphere, and futures prices have shown a strong posture. Among them, the price of US WTI crude oil futures rebounded from $ 55.40 / barrel to $ 59 / barrel. The price of Brent crude oil futures rose from US $ 60.70 / barrel to US $ 64.2 / barrel. The domestic crude oil futures 2002 contract also rebounded from 445 yuan / barrel to around 465 yuan / barrel.
From the perspective of the supply side, the "OPEC +" oil-producing countries conference held in early December, which had received much market attention, finally achieved optimistic results. In order to cope with the risk of falling crude oil demand due to the weak global economy next year, “OPEC +” oil producers have decided to expand the scale of production reductions in the first quarter of 2020, adding another 500,000 barrels / day to 1.7 million from the original 1.2 million barrels / day Barrels / day. Saudi Arabia has stated that it will voluntarily implement additional production cuts, that is, an additional 400,000 barrels per day on the basis of its production quota. Although the execution cycle of expanding production and reducing production is shorter and less than market expectations, the reduction in production in the next three months will bring a lot of boost to the crude oil market. At present, the tighter supply-side advantage is expected to continue in the short to medium term, even if there are unfavorable factors in the supply and demand situation of crude oil in the second quarter of next year. Risks such as low implementation rates occur, and “OPEC +” oil producing countries will also take intervention measures to ensure the smooth operation of oil prices.
Starting in December each year, the peak season for winter heating oil consumption in North America comes. Statistics from 2013 to 2018 found that from December to January of each year, there is a high probability that the heating oil cracking spread will maintain a high oscillation trend. Except for the weak cracking spreads in 2015, the remaining 5 years have performed strongly. The current heating oil cracking spread is near the 6-year average. With the arrival of winter, there will gradually be a small climax in demand for heating oil. It is expected that in the next two months, the cracking spread will continue to fluctuate at a high level.
In order to meet the peak season of heating oil consumption, US refineries are actively increasing the operating rate. Statistics on the US refinery operating rate data for the five years from 2014 to 2018 found that the country's refinery operating rate bottomed out around mid-October, and by the end of the year it could basically rise to 90% -97%. As of the week of December 6, the operating rate of US refineries was 90.60%, an increase of 7.50% from the low of 83.10% on October 11, and the rebound trend was established. It is expected that it will continue to rise in the later period. As demand picks up, the accumulation of U.S. crude oil has ushered in an inflection point and shifted into a dechemicalization cycle. According to the statistics of the six years from 2013 to 2018, we find that the U.S. commercial crude oil inventory generally peaks and declines around mid-November, and is eliminated until the end of the year. As of the week of December 6, U.S. commercial crude oil inventories reached 448 million barrels, a slight drop of 0.89% from the high of 452 million barrels on November 22, the end of the accumulation period and the start of the depuration cycle. Crude oil inventories are expected to continue to fall in the market outlook, which will provide the impetus for rising crude oil futures prices.
Driven by positive factors, the enthusiasm of the international crude oil market for long positions has clearly increased, and long funds have actively increased their positions. CFTC data shows that as of December 3, 2019, the non-commercial net long position of WTI crude oil was 428,035. Although the net long position decreased slightly week-on-week, it was a significant increase of 20.54% from the previous low of 355,085 on October 8. . Net long positions have steadily picked up, indicating that the market's confidence in bullish oil prices continues to increase.
In summary, the supply and demand of the crude oil market is expected to continue to improve in the future. Although there is a possibility of short-term oil price adjustment, the focus of prices is expected to rise steadily and continue to maintain a strong oscillation pattern.
