The Zhitong Finance App learned that Galaxy Securities released a research report saying that recently, the market is focusing on supply-side geopolitical risks. Combined with the US refinery operating rate, the operating rate of US refineries is expected to continue to rise. Oil prices may continue to operate at medium to high levels. The Brent crude oil price range is 75-85 US dollars/barrel. As of March 26, the average monthly prices of Brent and WTI were 84.4 and 80.2 US dollars/barrel, respectively, with month-on-month increases of 3.3% and 4.6%, respectively. The bank expects oil prices to continue to operate at medium to high levels in the near future. It is recommended to focus on low-cost non-oil route core assets and high-dividend oil and gas extraction targets, and recommend Baofeng Energy (600989.SH), Satellite Chemical (002648.SZ), CNOOC (600938.SH), etc.
Galaxy Securities's views are as follows:
The focus of oil prices continued to rise in March
On the supply side, geographical disturbances are frequent, and market risk premiums have rebounded. Affected by drone attacks, Russia's refining capacity may have been interrupted to 900,000 b/d. Currently, Russian oil storage capacity is tight, and the market is worried that Russian crude oil production may decline due to the interruption of some refining capacity. Furthermore, on March 3, OPEC+ member states announced the extension of the 2.2 million b/d voluntary production reduction plan until Q2. On the demand side, in the short term, after spring maintenance, the operating rate of US refineries gradually rebounded, downstream gasoline inventories declined at an accelerated pace, and terminal consumer demand is still relatively strong; in the short to medium term, the long-term economic growth rate of Europe and the US is expected to be under pressure in a high interest rate environment, and the growth rate of crude oil consumption may slow down or suppress the rise in oil prices. The bank believes that in the near future, the market is focusing on supply-side geopolitical risks, and the operating rate of US refineries is expected to continue to rise. Oil prices may continue to operate at medium to high levels. The Brent crude oil price range is 75-85 US dollars/barrel. As of March 26, the average monthly prices of Brent and WTI were 84.4 and 80.2 US dollars/barrel respectively, with month-on-month increases of 3.3% and 4.6%, respectively.
In January-February, China's apparent demand for crude oil increased steadily, with a year-on-year increase of 4.5%
In January-February, China processed 119 million tons of crude oil, up 3.0% year on year; crude oil production was 35 million tons, up 2.7% year on year; crude oil imports were 88 million tons, up 5.1% year on year; apparent consumption of crude oil was 123 million tons, up 4.5% year on year; external dependence remained high at 71.6%.
In January-February, China's apparent demand for natural gas increased sharply, with a year-on-year increase of 12.0%
In January-February, China's apparent consumption of natural gas was 71.6 billion square meters, up 12.0% year on year; production was 41.7 billion square meters, up 5.9% year on year; imported 30.7 billion square meters of natural gas, up 23.6% year on year; and external dependence was 41.8%.
In January-February, China's apparent demand for refined oil products increased sharply, up 15.4% year-on-year
In January-February, China's refined oil production was 70 million tons, up 7.1% year on year; refined oil exports were 5.63 million tons, down 41.6% year on year. Among them, the decline in gasoline exports in February was mainly affected by two factors. First, domestic demand for gasoline was phased in by domestic residents returning home and traveling during the Spring Festival holiday; second, gasoline shipments from the Middle East and India continued to flow into East Asia. The East Asian market supply was sufficient, and freight rates remained high, making it still difficult to export gasoline cargoes outside of Asia. The apparent consumption of refined oil products was 65 million tons, a year-on-year increase of 15.4%. Among them, apparent consumption of gasoline, kerosene, and diesel increased by 15.2%, 58.9%, and 9.3%, respectively.