The rebound of oil prices of the two international benchmarks reflects a reality: Although the COVID-19 epidemic is still spreading around the world, the level of energy consumption has not been greatly affected, especially in European and American countries, where oil and gas su

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Two international benchmark oil prices rebounded again reflecting a reality: although the new crown pneumonia epidemic is still spreading around the world, the energy consumption level has not been greatly affected, especially in European and American countries, where oil and gas supply is still very tight. As inventory levels continue to decline, the market's expectations for "OPEC+" increase in production are getting higher, and investment banks generally expect oil prices to continue to rise this year.

(Text丨Reporter Wang Lin)

production increase scale remains unchanged

Entering winter, natural gas and coal prices have risen sharply, and Europe and the United States have fallen into severe inflation due to the soaring energy costs, which has dragged down the economic recovery to a certain extent. Faced with the calls for rapid production increase from oil consumers such as India and Japan, and the pressure from the United States to release production capacity, "OPEC+" still adheres to the gradual production increase route it has formulated.

industry analysis agency S&P Global Platts pointed out that the "OPEC+" production cut alliance led by Saudi Arabia and Russia is gradually fading, believing that the impact of this variant is "moderate and short-lived". Therefore, although there may still be oversupply in the first quarter, given the relatively optimistic demand trend, it is decided to continue to maintain the current scale of increase in production.

Affected by this, Brent crude oil price climbed to $80/barrel for the first time in a month, and further rose to $80.8/barrel on January 5, and the US WTI crude oil price also reached $77.85/barrel. Since mid-December 2021, Brent crude oil prices have increased by more than 10%.

Since August 2021, "OPEC+" has been increasing production at a monthly scale of 400,000 barrels per day, and has held a regular production cut meeting every month to evaluate the trend of the oil market until production returns to pre-epidemic levels.

International oil prices rebounded strongly in 2021, but with the recurrence of the new crown pneumonia epidemic, Brent crude oil prices fell from a high of US$85 per barrel in October 2021 to US$65 per barrel in early December 2021. The United States then took the lead in releasing strategic oil reserves to alleviate inflation and boost oil prices, but this is just a drop in the bucket for international crude oil demand, and it plays more a signal role in adjusting oil prices. The decision on the oil market trend is still in the hands of " OPEC +".

hedge fund buys oil again

As the market's concerns about Omickron decline, hedge funds begin to buy oil again. At the end of November 2021, the market panic about Omickron caused a large number of crude oil futures to be sold, and international oil prices immediately hit the largest single-day decline since April 2020. Data compiled by Thomson Reuters shows that as of December 28, 2021, hedge funds purchased 54 million barrels of crude oil in the six most active trading oil futures and option contracts. Oil contract bulls in the last week of 2021 hit the biggest increase since August 2021, indicating that the fund is increasingly optimistic about the bullish price of oil.

Obviously, factors such as "OPEC+" steadily increasing production, the United States restricts shale oil production, and weakening of epidemic concerns have prompted hedge funds to be more optimistic about the oil market outlook in 2022 than a month ago, so they are rebuying oil futures and option contracts at the fastest pace in the past four months.

Oil Price Network pointed out that although the number of new crown pneumonia cases in the United States and other countries has recently hit new highs, the market's panic about Omickron has begun to weaken, which has brought certain encouragement to oil prices. Hong Kong International Group pointed out that the "OPEC+" move brought a little comfort to the market, which shows that they are confident in the demand outlook in the coming months.

In fact, once the epidemic situation changes significantly, the rebound rate of oil demand in 2022 will be much faster than expected, and the supply gap will further increase.In this regard, Christyan Malek, an analyst at , JPMorgan Chase, believes that "OPEC+" may release more production later this year.

Oil prices may rise twice this year

"The infection rate of new coronary pneumonia in the United States, the United Kingdom and other countries is still rising, and restrictions are continuing to be implemented, but the optimism in the oil market is truly visible." Tamas Varga, senior analyst at PVM Oil Associates, a large crude oil economics firm, said, "The trend of the oil market in 2021 proves that despite the challenges in the fight against the epidemic, we have the ability to defeat this epidemic." Emotions like

have driven more expectations of bullish oil prices. UBS pointed out that crude oil and petroleum products prices benefit from oil demand rising above 2019 levels, and Brent crude oil prices are expected to rise to US$80-90 per barrel in 2022.

Goldman Sachs believes that Omickron has limited economic impact and is expected to remain around US$85 per barrel in 2022 and 2023, and may even exceed US$100 per barrel. Blackstone also boldly predicts that international oil prices will rise to $100 per barrel in 2022, citing that "OPEC+" and US shale oil cannot meet demand growth this year.

JPMorgan Chase also holds a similar view, believing that factors such as the global economic recovery, the decline in crude oil inventories and the slow recovery of production capacity will drive international oil prices to double-digit growth this year.

However, there are also opinions that there are still many uncertainties in the future trend of the international oil market. CNBC News Network of the United States said that in 2022, the oil market will continue to be affected by the geopolitical of . Events such as the Russian-Ukrainian standoff and Iran nuclear negotiations may experience phased progress, which will affect the trend of international oil prices at that time.

JPMorgan expects that if the United States eventually lifts sanctions on Iran's , the latter may add 1.4 million barrels per day to 2022.

"In the past year, oil inventories have declined and supply is in short supply. The situation this year has begun to be different. It is expected that no later than the second quarter of this year, oil inventories will begin to accelerate global growth." Ed Morse, global head of commodity strategy at Citigroup , said, "So, we believe that oil prices may still be under pressure this year."

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Intern Editor | Li Zemin

Editor-in-chief丨Yan Zhiqiang