Lead "tighten the day" "three barrels of oil" began the war of attack and effectiveness

International oil prices have plunged more than 60% in the past three months, falling below the $30 mark.Under the imbalance of supply and demand, low oil prices may be the normal situation that the energy industry, especially the petrochemical industry, has to face in the future.

Faced with the dual pressure brought by the epidemic and the oil price collapse, sinopec announced that from March 23 BBB 0 on June 30 in the whole system to launch the "100 days to make progress" operation, and petrochina, cnooc also stressed to "tighten the time"."Three barrels of oil" will be through a series of measures to expand the market, optimize adjustment, reduce capital expenditure, and spare no effort to complete the annual production and operation tasks.

On March 6, when a new round of "Opec +" production cut talks broke down, Saudi Arabia quickly launched a "price war", offering unprecedented discounts to all its crude buyers.

Oil-producing countries began to increase production and cut prices to grab the market.Saudi oil giant aramco said supplies would reach 12.3 million barrels a day in April, allowing it to produce crude at its maximum capacity of 12 million barrels a day over the course of a year without any new capital expenditure.Russia responded by saying it had the ability to boost production by 500,000 b/d to a record 11.8 million b/d.Iraq, Nigeria, the united Arab emirates, Kuwait and other countries have also announced to join the army to increase production.

While supply has soared, demand has slumped.Covid-19 has spread globally, and many countries and regions have taken control measures, and economic activity has slowed significantly.

Below this, international oil price falls ceaselessly.Light crude for may delivery settled at $24.49 a barrel on the New York mercantile exchange as of March 25, while London brent crude for may delivery closed at $27.39 a barrel.

Standard & poor's global ratings cut the 2020 price assumptions for brent crude and west Texas intermediate by $10 a barrel each.The current assumption is that brent crude will average $30 a barrel for the rest of 2020 and wti $25.Citigroup expects global oil consumption to fall by 4m b/d, with demand shrinking by 11m b/d in the second quarter, with oil averaging about $17 a barrel or less.Standard chartered also warned that average oil demand would fall by 3.4m b/d year on year in 2020, with brent's low in the second quarter "likely to be well below $20 / b".

With the peak market demand gradually approaching, maybe in a long period of time, the "stress state" of the current oil price decline will become the normal state of oil price volatility that the oil industry has to face in the future.

The energy industry has been hit by both the pros and cons

The normal state of low oil prices affects the whole world.For China, the advantages and disadvantages coexist, and the energy industry, especially the petrochemical industry, suffers certain impact.As the world's largest oil importer, low oil prices are sure to save a lot of money on oil bills, which will also drive down gas and coal prices.

China imported 510 million tons of crude oil in 2019, up 9.5 percent from the previous year, with a cumulative import value of 241.319 billion us dollars, data showed.From January to February 2020, China imported a total of 86.088 million tons of crude oil, up 5.2 percent year-on-year.

That's not good news for the oil and chemical industries, which will see record lows on several measures in 2019.According to a report released by the China federation of petroleum and chemical industries, revenue in the domestic oil and chemical industries grew 1.3 percent in 2019, while total profit fell 14.9 percent, both the lowest in four years.Refining profits fell 42.1%, the biggest drop in five years.Profits in the chemical industry fell 13.9%, the biggest drop in a decade.

Lower oil prices will also have a negative impact on upstream exploration and development and the oil services sector.Standard & poor's global ratings said the big oil companies' rating buffers were at risk because of dimmer oil price expectations.

Each show the skill "three barrels of oil" fight together

Oil companies must be prepared to face long-term and complex challenges and fight a "protracted war" against low oil prices. They cannot rely on the rise of oil prices for their development. High oil prices do not necessarily lead to high profits, and low oil prices do not necessarily lead to low competitiveness.

                                                                                                                                      By Yangyang