WTI crude oil again lost $90 / barrel bearish expectations strengthened

Since the international crude oil price rose and fell in June, oil prices have almost given up the year's gains
.
After falling below the $90/barrel mark on August 31, WTI crude oil futures prices continued to weaken, and the lowest has recently bottomed out above
85 yuan/barrel.

With the weakness of the crude oil market, downstream chemical commodities are also green
as a whole.
Under the background of the negative catalysis of the epidemic, the expectation of global crude oil accumulation and the expected tightening of liquidity, the short-term downward trend of international oil prices may be difficult to change
.

Oil prices in both internal and external markets resumed their decline

In the context of weakening supply and demand expectations in the oil market, the price trend of crude oil futures at home and abroad diverged in August 2022
.

However, at the end of August, the main domestic crude oil futures contract 2210 broke the previous rally and continued to fall
.
On September 2, the main contract fell 1.
52%, a cumulative decline of more than 7%
in the past three trading days.

Recently, the spread between the internal and external prices of crude oil has continued to narrow.

After falling below the $90/b mark again on August 31, the WTI October crude spot contract closed down $2.
94, or 3.
28%,
on September 1.
The ICE Brent November crude spot contract closed down $3.
28, or 3.
43%,
at $92.
36 a barrel.
Shanghai crude oil prices fell overnight, with the main period SC2210 closing at 691.
1 yuan / barrel, down 15.
0 yuan / barrel, or 2.
12%.

"Since June, international crude oil has been bottoming out in repeated ups and downs, and Brent crude oil has fallen by $30 / barrel from June 9 to August 17, with an amplitude of 25%
.
" Business analyst Zhao Tingting pointed out that crude oil in August was constantly playing between the current situation of tight supply and the risk of falling demand caused by economic recession expectations, and crude oil showed a "W" shaped trend of first falling and then rising and then falling again, during which fluctuations were more frequent, and oil prices were deadlocked to the bottom
.

Guotai Junan Futures believes that the market is still jealous of the Fed's 75BP interest rate hike expectations in September and the downside risks
to the future economy under high inflation data.
In addition, the weakening of overseas refined oil products (especially gasoline) crack spreads and the accumulation of crude oil inventories still weaken OPEC or tighten supply
.

Baocheng Futures also pointed out that due to the repeated occurrence of overseas epidemics, coupled with the Federal Reserve and the European Central Bank's interest rate hikes triggered by the recession crisis in Europe and the United States, the demand for crude oil and other commodities is facing the risk
of decline.
Under the background of the increasing pressure on the supply side of the oil market, the accumulation phenomenon caused by oversupply is becoming more and more obvious
.

With the recent decline in domestic and foreign oil prices, chemical commodities have also weakened
overall.

According to the monitoring data of the business agency, the chemical industry index has fallen by 23% in the past three months, during which it has fallen for 10 consecutive weeks
.
However, the overall decline in the market narrowed
in August.

On September 1, among the 129 chemicals monitored by Jinlianchuang, 32 varieties rose, 71 varieties remained stable, and 26 varieties fell
.

Among the varieties that declined, the largest declines were 64% of diammonium particles (-9.
76%), sulfur solids (-2.
61%), MTBE (-2.
00%), PX (-1.
86%), and natural latex (-1.
79%)
.

The short-term downward trend may be difficult to change

Affected by the global economic downturn, crude oil demand expectations have been significantly weakened
.

Baocheng Futures pointed out that Iran's crude oil production in July was 2.
55 million barrels / day, and Iran's crude oil production before sanctions was 3.
8 million barrels / day, if the Iranian nuclear agreement is implemented, there is room for growth of 1.
25 million barrels / day on the production side, which is expected to accelerate the inflection point of replenishment
.
At the same time, as OPEC+ oil producers increase crude oil production capacity month by month, after fully implementing the production increase plan in August in the third quarter, OPEC+ oil producing countries will return to the level before the epidemic in 2020, and the tight supply advantage will be lost
.
Demand is being weighed down by the global recession, which has led to lower oil demand forecasts, with global oversupply and demand expected to reach 1.
59 million b/d and 840,000 b/d
in the third and fourth quarters of 2022, respectively.
Looking forward to 2023, due to the continued interest rate hikes by the Federal Reserve and the European Central Bank, the global inflation level is expected to be contained, the era of high oil prices has shifted to the era of medium oil prices, and demand expectations are expected to pick up, when the crude oil market maintains a balance of a slight excess of supply and demand
.

Guotai Junan Futures believes that in the third quarter, it is still necessary to be vigilant against the downside risk of oil prices in the process of formal bottoming, and the core logic is: First, the downside risk of oil prices in the peak stage of overseas inflation is often greater than the upside risk; Second, globally, the marginal deterioration of the supply and demand side of crude oil itself is still continuing; Third, the dollar is temporarily strong
.
But if OPEC starts the tightening of the supply side as it said, oil prices cannot rule out ending the early reversal of the downside since June, which is also the biggest upside risk
in the near future.
Before the OPEC meeting on September 5, oil prices may still be volatile
.

For the domestic chemical commodity market, Zhao Tingting believes that many factors such as production restrictions, power restrictions and driving restrictions in August have provided impetus
for the market to "rise" at the end of the month.
The reduction in the supply side will continue to spread, and the market inventory will fall again, providing a boost for the surge of chemical raw materials, and the chemical market will continue this trend in September
.
However, from a macro perspective, domestic demand is shrinking, manufacturing orders are insufficient, corporate profits are in trouble, it is still difficult to have major benefits in the short term, and the international situation is not optimistic, exports have not improved significantly, and in the long run, the market continues to rebound is not good enough, and the future growth is limited
.