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Original title: International oil prices are rising
On the first trading day of the Year of the Ox, procyclical assets shone brightly and the commodities, energy, and chemicals sectors rose sharply.
Industry insiders analyzed that during the long Spring Festival holidays, international oil prices spiked and cyclical assets rose resoundingly; the trend for the top three commodity leaders showed a turning point. Then, commodities and related products are expected to perform better.
● Our reporter Ma Shuang Zhang Lijing
Commodity leaders shot hand in hand
In 2020, the gold market set a record. Earlier this year, the other two leading commodities, crude oil and copper, showed tipping points. Since November 2020, the price of Brent crude oil futures has risen from about $ 37 to $ 65, an increase range of more than 75%; Shanghai copper futures prices have recovered to a new high since September 2011.
In the context of weak global liquidity, some analysts believe that the above phenomenon can be attributed to rising market inflation expectations. The rebound in international oil prices during the Spring Festival holidays strengthened this expectation, prompting a rebound in pro-cyclical assets.
At 24:00 hours on February 18, the national retail price of gasoline and diesel per ton will increase further. According to calculations by Zhongyu Information, filling a tank (50L capacity) with gasoline will cost 11 yuan more.
Before the rise in the price of refined oil, industrial commodity futures and A-share pro-cyclical assets had already risen in price. On February 18, domestic prices for energy and chemicals futures rose sharply, and the procyclical A-share sector performed strongly.
According to data from Wenhua Finance and Economics, at the end of February 18, the energy and chemical sector led the domestic market for basic products: daily limit of styrene, basic fiber and ethylene glycol; plastic, crude oil and PP futures contracts increased by more than 7%, non-ferrous metals Black futures prices have soared.
In terms of A shares, procyclical asset gains were among the highest, and the petrochemicals sector rose sharply. Wind data shows that on February 18, the precious metals, coal, base metals, energy equipment, and iron and steel sectors led gains by 7.07%, 6.52%, 6.17%, 5.26% and 4.85% respectively; in terms of petrochemicals. assets, oil and gas wind The index rose 4.80%, the daily intercontinental oil and gas limit, Huajin shares rose 9.06%, Sinopec rose 7.43% and Gaoke Petrochemical rose 5.65%.
Industry insiders believe that the sharp rise in international oil prices during the Spring Festival holidays triggered the opening of domestic energy and chemical futures and other pro-cyclical assets have also risen. The sharp rise in international oil prices is at the center of this asset price cycle.
According to data from Wenhua Finance, the current round of oil price rally started in November last year and accelerated in February this year. From February 1 to 18, the cumulative increase in US crude futures prices and Brent crude futures prices reached 18.12% and 17.77%, respectively.
Cycle assets resonate
Since November last year, international oil prices have been affected by many factors.
Sui Xiaoying, chief crude oil analyst at the Founder’s Medium-Term Futures Research Institute, told a China Securities News reporter that first, after the US elections, the market uncertainty has gradually disappeared; second, the new round of US fiscal stimulus measures has gradually disappeared. landed; third, the recent new world crown The pneumonia epidemic has undergone a clear turning point, and the market’s appetite for risk has recovered significantly; fourth, in January, Saudi Arabia announced that it would voluntarily reduce oil production by 1 million barrels per day in February and March, which intensified the contraction on the supply side, and fifth, the recent severe cold in Texas, United States . In the short term, the above factors still support the disc, and oil prices are expected to continue to perform strongly.
From the perspective of the resonance between crude oil and other assets in this round, Li Lei, senior energy analyst at Merya Futures, believes that oil price fluctuations affect inflation and the performance of other assets across two main chains . One is the transportation costs of refined crude oil. Crude oil is the main raw material for petrochemical products. Fluctuations in international oil prices will directly affect the prices of domestic oil products, natural gas, and other oil and gas products, which in turn will affect the prices of my country’s transportation services and prices. residential gas, and ultimately reflect changes in the prices of consumer products. The second is crude oil, petrochemicals, daily necessities. The change in the price of crude oil affects the price changes of petrochemical products such as plastics, rubber and chemical fiber, which in turn affects the prices of agricultural production and the daily needs that use them as raw materials, thus affecting the CPI.
Sui Xiaoying said that rising international oil prices are obviously beneficial for upstream oil drilling companies and can increase operating profits for such companies. However, for oil refining companies and oil consuming companies, rising oil prices have increased the costs of purchasing raw materials. and petroleum derivatives.
“Fluctuations in the price of oil will be reflected in the energy consumption headings in the CPI. Excluding other factors, the increase in oil prices will raise the CPI, and the fall in oil prices will push the CPI down” . Sui Xiaoying said: “Crude oil is the main bulk commodity. Commodities will act as a guide.”
According to CITIC Construction Investment Securities research, WTI Crude Oil and the S&P Agricultural Index are selected as representatives of Crude Oil and Agricultural Index respectively. Looking back at the performance of the two in history, in general, over most time periods, there is a relationship between WTI crude oil and the S&P agricultural index. There is a positive correlation and a common trend of change.
There are tricks for investing in stocks
Looking ahead, Li Lei analyzed that the economic recovery and contraction in supply are expected to drive up oil prices.
“There are signs of a turning point in the epidemic in Europe and the United States. Along with flexible fiscal and monetary policies, the global economic recovery has raised better expectations for oil demand. In the process of slow recovery in demand, the Crude oil supplies remain relatively tight and global crude oil inventories continue to deplete oil prices. To a new level. In the future, the global economic recovery will fuel the recovery in crude oil demand and production cuts in oil. OPEC + can support higher oil prices, “Li Lei said.
Crude oil is a typical risk asset and rising prices will increase the appetite for capital market risk. In the context of rising oil prices, which sectors are expected to benefit?
From a major asset allocation perspective, CITIC’s futures asset allocation research team stated that rising crude prices are good for the equity and commodity markets.
“Rising oil prices provide opportunities for more energy-based futures products. Crude oil is the king of raw materials and the lifeblood of the industry, and its price increase will drive the price of products industrials form a cost-driven surge. In the industrial bull market, investors can not only make a profit directly by making more domestic SC crude oil futures, they can also invest in futures that are highly correlated with crude oil such as asphalt, fuel oil , polypropylene and PTA, “suggested Li Lei.
Sui Xiaoying said that rising oil prices are expected to affect other industrial products as well, especially energy and chemicals. Petrochemicals are recommended to keep multiple allocation, but chasing higher is not recommended. At the same time, relevant Petrochemical reserves can be deployed.
