Industry News

Our reporter Wang Ning

 

Recently, international oil prices have once again experienced a strong trend, with WTI crude oil (West Texas Intermediate) futures prices fluctuating at the $100/barrel mark, and Brent crude oil futures prices briefly rising to the $110/barrel mark before experiencing a slight correction.

 

On October 20th Beijing time, the Brent crude oil contract for December was reported at $109.94 per barrel, an increase of 0.71%, with a holding volume of 425000 lots; The WTI crude oil contract for November was reported at $103.99 per barrel, an increase of 0.81%.

 

Liu Jin, Chief Macro Analyst of COFCO Futures Research Institute, told Securities Daily reporters that the current rise in international crude oil futures prices is mainly driven by two main lines: first, the further escalation of geopolitical conflicts in the Middle East; Secondly, the US macroeconomic data in September exceeded expectations, strengthening the repricing logic of asset inflation. Energy prices have become the core driving force behind this round of inflation rebound, with gasoline and diesel prices rising significantly and gradually transmitting to transportation, trade, and some industrial costs. This has led to international crude oil not only being driven by geopolitical risks, but also being included in the trading chain of "energy inflation interest rate expectations".

 

Li Qi, a researcher at the Investment Consulting Department of Zhongyan Futures, said that the basic support for the current rise in oil prices is the disturbance of geopolitical risks in overseas markets, restricted access to key transportation routes, and fluctuating supply from oil production facilities and refineries. Overall, the supply side has lost stable output. The foundation for maintaining high volatility in short-term international oil prices still exists, but lacks linear upward support

 

Since the fourth quarter of this year, international oil prices have maintained an overall upward trend, with WTI crude oil futures prices continuing to strengthen from $86 per barrel, creating a "seven consecutive bullish" market during this period. Regarding whether short-term oil prices can continue to rise, Liu Jin believes that the current crude oil futures prices are in a pattern of high and short positions, and the market may show a trend of rising and falling in the future. The conditions for sustained unilateral upward attacks are not sufficient, and bearish pressure is gradually increasing.

 

Zhao Xiaoxiao, the head of Anliang Futures Research Institute, told reporters that the main support for the current rise in oil prices is still supply shortage, and the current high oil price center is difficult to shake. The geopolitical conflict has not yet shown substantial easing, and the risk premium is difficult to quickly dissipate. In addition, there is a possibility of a significant surge in oil prices due to the emergence of uncertainty factors on the supply side. However, high-level fluctuations will gradually increase, and it is necessary to pay attention to the possibility of temporary easing. If the uncertainty factors on the supply side are eliminated, the premium will quickly emerge, causing significant fluctuations

 

Analysts believe that the core of current crude oil asset allocation lies in the rebalancing between geopolitical risk drivers and sustained downward revisions in demand expectations; The short-term high and wide range fluctuations in oil prices make speculation difficult, and the allocation logic should prioritize hedging risks rather than a one-sided game direction.

 

The core of crude oil asset allocation is to control risk premium and reserve return resilience. "Li Qi said that the upstream supply side is the priority carrier for carrying the systematic upward logic of the oil price center. Its pricing basis is that the duration value of the enterprise's free cash flow is re priced after the center moves up, and some premiums are sold back, but the central price remains strong. The enterprise's cash flow and dividend safety cushion are still effective. Currently, risk hedging work should be done for the oil price correction.

 

In Zhao Xiaoxiao's opinion, the current prices of commodities such as crude oil and fuel oil are relatively strong, and it is necessary to pay attention to the risk of high-level fluctuations. However, downstream chemical products may experience a rebound. "The continued high price of crude oil will affect the inflation level of the United States, thus bringing about tightening expectations for the Federal Reserve's policy. If the interest rate increase cycle opens again or brings about a new round of adjustment to the global financial market, investors can short-term allocate treasury bond bonds and other safe haven assets to avoid risks."

 

(Editor in charge: He Xin)