International Oil price (Brent) (‘22/4M)

 

1. Operation and supply and demand

• When the US commercial oil inventory was reduced by 80.2 million barrels compared to the previous week, unlike the market expectation (2.5 million barrels ↑) as of 4.15 days, it increased oil exports due to the increase in oil production (100,000 b/d ↑) and Russian crude oil replacement demand (209 million barrels↑).
  · Gasoline and middle oil inventory decreased 76.1 million barrels and 266.4 million barrels, respectively, due to the improvement of demand.
  
  
• Shanghai, China, has relaxed some blockade, but when the infected people have been spreading again, the Shanghai authorities said on April 21 that the Shanghai authorities will maintain high -strength defense measures.

 

2. Crude oil rig count checkup

The correlation between Baker Hughes Rig Count and Brent is very high at 0.79. As oil prices rise, the decreased Rig Count will increase again, which affects future supply growth, reducing international oil prices and reducing Rig Counts. Due to the COVID-19 influence, the demand for crude oil decreased, with 172 Rig Counts in August 20, down to nearly one-seven years compared to two years ago. Rig Count is also increasing with time lag, as prices of crude oil demand rapidly rebound. As of April 22, 549 unlikely to worry about oversupply.

 

3. Checking the utilization rate of crude oil refinery

 The correlation between the utilization rate (%) and the brent is not high at 0.18. However, as you can see in the graph above, the trend is similar to the movement. The US crude oil refinery utilization rate was the minimum in the last 10 years, with the utilization rate (69%) in May 20, with the exception of the temporary plunge (February 21) due to the hurricane. In general, when the utilization rate of crude oil purification stations decreases, petroleum products have a price increase effect due to the decrease in volume, and crude oil input decreases due to oversupply. In addition, the utilization rate of crude oil refinery temporarily increases to prevent the rapid drop in crude oil prices (October 2014). The current trend is that crude oil prices continue to rise, while the utilization rate of crude oil refinery is also maintained by 91%.

 

4. Geopolitical issue

• German Foreign Minister said he plans to stop importing Russian oil by the end of the year, and the EU is preparing to ban Russian oil imports.
  . However, there is still a disagreement with the sanctions of the Energy sector in the EU, and the US Treasury Secretary said that the EU's entire ban on imports may cause a surge in oil prices.
  · JP Morgan analyzes that if the EU immediately stops Russian oil imports, it will not be able to secure economics or time that can be reappointed to exports to China and India, and that the international oil price can soar to $ 185/b. If the income is reduced over a four -month grace period, such as the prohibition of imports, there will be no significant change in oil prices.
  
  
• However, Russia's reduction in oil exports is known to be slower than expected.
  . Russian crude oil exports are maintained at 4.54 million B/D on April 20th, and major petroleum products exports have decreased 87.3 million b/d in March, but in April, 27.3 million b/d increased crude oil and major products. Export volume is reduced by 640,000 b/d from 743 million B/D in February to 679 million B/D in April (KPLER)
  
  
• Democracy of the protesters that require the resignation of the tripoli -based prime minister in the petroleum facility on April 17-18, the major oil field and export terminal operation occurred, and Libya's oil production decreased by about 550,000 B/D by about 550,000 B/D.

 

5.     Finance

 

 

• The World Bank Governor said that the global economic growth forecast will be lowered from 4.1%to 3.2%this year, reflecting Russia's impact of Ukraine invasion.
  · IMF is expected to be higher in inflation than originary (5.7%developed countries, 8.7%in developing countries)
  
  
• Chairman of the Fed Powell, evaluated that the inflation has passed, and it will focus on returning inflation to the target (2%), suggesting the possibility of raising a 50bp at the May FOMC meeting in May.
• The ECB vice president said that the ECB terminated the bond purchase program in July and raises the base rate as early as July, and that the monetary policy decision depends on the indicator of the June policy meeting.
  . Eurozone's March inflation is 7.4%year -on -year, the highest level ever.
  
  
• Morgan Stanley, on the other hand, analyzed that the Brent oil price outlook for the third and fourth quarter of this year was $ 130/b and $ 120/b, respectively, and that the shortage of 1 million B/D will continue within the year.

 Thanks.