On Monday (November 19), INE crude oil SC1901 contract closed slightly lower. Due to poor API data, INE crude oil experienced some decline. Although the decline was recovered later, it failed to make up for the previous regulatory gap, and the overall trend was short. Recently, the market's bullish will fell to a low point, leading to increased selling pressure on oil prices.
Transaction Overview
On Monday, the price of ICE crude oil SC1901 contract fell sharply after surging overnight, and the lowest point was 466.9, which rebounded in shock. It weakened again after rising to the position near 476 in the morning, and ran in shock after ending the decline near 471 in the afternoon. It was 0.8 yuan or 0.17% lower than the settlement price of the previous trading day, and was reported at 472.4 yuan/barrel.
The contract price of SC1901 ended slightly lower, with a premium of US $0.8/barrel compared with Brent crude oil and about US $1.2/barrel compared with the spot price of Oman crude oil on the 16th. 373084 contracts were closed, and the position decreased by 4244 to 63538. The main contract SC1901 sold 123006 lots, and the position increased by 2904 lots to 32690 lots; The SC1812 contract reduced its position from 7974 to 15962, and the main force changed more months.
Last week, a large number of warehouse receipts (1.923 million barrels) were registered in the Zhanjiang delivery warehouse, and the price difference between SC1901 and SC1812 once presented a risk free arbitrage opportunity. Such a large number of warehouse receipts are placed in Zhanjiang Port. If no one is willing to accept and take away the goods, the monthly difference structure of SC will continue to be in the contango state. In addition, due to the delivery pressure, the price difference between Brent and SC will expand.
Technically, the SC1901 contract closed slightly lower. The futures price tested the front-line pressure of 480 yuan/barrel, and the regional support of 460 yuan/barrel was tested below. The short-term Shanghai crude oil futures price tended to rebound from the oversold trend.
The supply side production reduction is still inconclusive, and the curve structure at the near end has dragged down oil prices
The news that OPEC oil producing countries will discuss increasing the production reduction scale to 1.4 million barrels/day in 2019 at the December meeting supports the short-term market atmosphere, but the specific measures have not been implemented; In addition, the United States has given some regional exemptions, which has weakened the sanctions against Iran; EIA data showed that the US crude oil inventory increased by 10.27 million barrels last week, and the US crude oil production increased to a new high of 11.7 million barrels/day. The concern of oversupply limited the rebound space of the market.
From the perspective of the current forward curve of crude oil, the curve structure at the near end has changed to a discount in the recent month, and the overall forward curve structure has become flat, which means that the surplus situation in the real goods market continues. The price difference between months is not conducive to covering the storage costs, and the weakness of the spot end has a drag on oil prices. Therefore, before the new production reduction discussion is finalized, the suggestion for the oil price trend is still to look at the rebound from the super decline.
At present, the refining producers in the United States have just resumed production from the renovation, and the winter peak has not yet fully arrived, which to some extent limits the refining revenue, which is adverse to the demand for crude oil, and thus puts pressure on oil prices. However, with the advent of winter, refining revenue began to grow steadily, which will promote the increase of crude oil imports and boost oil prices. Due to the linkage effect of the oil market, this may drive the synchronous recovery of INE crude oil.
Editor in charge: Zhang Yao
