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2021
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07
Oil prices hit a three-year high! Will the future rise?
According to Bloomberg News, OPEC canceled the ministerial meeting earlier this month because Saudi Arabia and the UAE failed to resolve the dispute. This means that the organization will not increase production in August. International crude oil prices hit a three-year high as OPEC failed to reach an agreement on a new round of crude oil production.
According to Bloomberg News, OPEC canceled the ministerial meeting earlier this month because Saudi Arabia and the UAE failed to resolve the dispute. This means that the organization will not increase production in August. International crude oil prices hit a three-year high as OPEC failed to reach an agreement on a new round of crude oil production.
1. international oil market situation remains uncertain
Because of the impact of the epidemic, OPEC decided in April last year to cut production by 9.7 million bpd for a period of two months from May 1, 2020; by 7.7 million bpd from July 1 to December 2020; and by 5.8 million bpd from January 2021 to April 2022.
At the end of last year, the United Arab Emirates said it would withdraw from OPEC. The country believes that the distribution of production ceilings is unfair, leading to a reduction in its oil economic revenues and the economic impact of the new coronary pneumonia epidemic is becoming more severe.
Since the beginning of this year, international oil demand has recovered rapidly. The International Energy Agency said in its monthly oil report in June that global oil demand will return to pre-epidemic levels by the end of 2022, adding 5.4 million bpd in 2021 and another 3.1 million bpd next year.
On July 1, the 31st OPEC Joint Ministerial Monitoring Committee (JMMC) and the 18th OPEC and non-OPEC Ministerial Meeting were held in Vienna, Austria.
Because of differences in production increases between the UAE and other OPEC members, the meeting was twice deadlocked in negotiations.
OPEC member states, represented by Saudi Arabia and Russia, proposed to resume crude oil production of 400000 barrels per day per month from August to December this year and extend the oil supply agreement reached last year to after April 2022.
The UAE proposed that the premise of supporting this decision is to increase its production reduction baseline by 700000 barrels per day.
Bloomberg said that given the situation is still changing, OPEC + may also restart negotiations at any time. With oil prices already up about 50 per cent this year and heading towards $80 a barrel, oil-consuming countries, worried about rising inflation, could put more pressure on the union.
2. oil price bullish sentiment is strong
Goldman Sachs said the lack of an agreement had created uncertainty over OPEC's crude production route. The basic expectation is still that OPEC will gradually increase production before the first quarter of 2022, which will eventually help meet its preferences. Brent crude oil prices are expected to remain at US $80/barrel this summer.
According to a report Staunovo by UBS analysts Giovanni, with no further supply release from OPEC, the oil market may tighten further and may cause Brent crude to climb to $80 per barrel by the end of September.
Iraq's oil minister said that oil prices are not expected to fall below $70 a barrel by the end of 2022, supports the extension of the OPEC production reduction agreement to December 2022, has a good relationship with BP, and hopes to have more projects with the company.
Saad Rahim, chief economist of oil trader Tok Group (Trafigura Group), said in an interview with Bloomberg that OPEC is satisfied with the speed of demand recovery and current oil prices, but the situation shows that "the market needs more oil." Oil prices may reach the level of $100 per barrel in a year and a half.
Global crude benchmark oil prices could rise to $100 a barrel next year as travel demand rebounds, according to Bank of America.
3. oil company profits soar this year
PetroChina announced that its net profit in the first half of the year is expected to increase by 75 billion -90 billion yuan, turning losses into profits year on year. Based on this estimate, PetroChina is expected to make a profit of 45 billion -60 billion yuan in the first half of this year, or the best semi-annual report performance of PetroChina in the past seven years.
Sinopec announced that it expects to achieve a net profit of 36.5 billion yuan to 38.5 billion yuan in the first half of the year, an increase of about 59.4 billion yuan to 61.4 billion yuan over the same period in 2020, and an increase of 16.6 to 23% over the same period in 2019.
The international oil giants have not yet announced their semi-annual reports, but judging from the performance of the first quarter, the performance of the first half of the year is very likely to increase significantly.
Exxon Mobil2021Revenue in the first quarter was $59.147 billion, compared with $56.158 billion in the same period last year. Net profit for the quarter was $2.73 billion, compared with a net loss of $0.61 billion for the same period last year.
Royal Dutch Shell (Royal Dutch Shell) reported revenue of $59.115 billion in the first quarter of 2021, compared with $60.959 billion in the same period last year. Net profit for the quarter was $5.66 billion, compared with a net loss of $24 million for the same period last year.
Total (TQ) revenue was $386.33 in the first quarter of 2021, compared to $38.577 billion in the same period last year. Net profit for the quarter was $3.444 billion, compared with $34 million a year earlier.
BP's (BP) revenue was $34.544 billion in the first quarter of 2021, compared with $30.973 billion in the same period last year. Net profit for the quarter was $4.667 billion, compared with a net loss of $4.665 billion for the same period last year.
* This article only represents the author's personal views and does not constitute platform opinions or investment advice.
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