If the international oil price remains at the current low level, will domestic refineries face a dilemma?

There are two kinds of refineries, one is self-produced and sold, and the other is imported oil. The fate is different when the oil falls to an ultra-low level. It is an opportunity to increase the capacity of processing refineries that import oil from overseas, but the self-operated refineries may suffer large-scale losses and have to cut production or stop production, which is a dilemma.

The cost of oil exploitation should be the highest in shale oil exploitation in the United States, and it is expected to reach 50 US dollars/barrel; Saudi Arabia's oil exploitation cost is the lowest, only 9 dollars/barrel; The cost of Russian oil against it will also reach 20 US dollars/barrel. However, China's oil exploitation cost is definitely higher than Russian's $20/barrel, and it is expected to exceed $30/barrel.

At present, the international oil price has dropped to about $20/barrel, so it is more suitable to process imported oil to produce gasoline and other products. It is urgent to increase the production capacity of refineries with imported oil and reduce the output of oil fields with self-produced and self-sold oil processing. This is also the case with ice and fire.

If the international oil price continues to operate at a low level, the total oil sales will continue to increase. In the case of gradually importing oil for processing, the production capacity of processing refineries will reach saturation, and refining will generally be calculated by weight, not by price. Even if the unit price of processing fee will drop, it will not be too big. This is an opportunity for these refineries and the best opportunity to increase their income.

In the case of a sharp drop in oil prices, there will be two different situations, which can also be said to be: "half is seawater and half is flame!" " "Imported oil processing refineries are booming, and self-refining enterprises will be in a semi-flameout state.

The domestic oil price is based on the reserve price (USD 40). For a long time, the profits of this international crude oil importer will definitely be great, and at the same time, it will reduce exploitation and increase imports. However, behind China, there are also a large number of enterprises in the transformation stage, and most of them have a profit of around 7% a year. If there is no floor price policy in China, it will lead to serious deflation, and crude oil is a commodity import, so floor price will not be adopted. At that time, the prices of many industrial products will fall (like pork, shops and even other meats will increase their prices, and the profits of shops and restaurants will be greater than their own price increases). Originally, he wanted to buy 1 yuan for a catty of meat, and he could sell it to consumers to earn an extra yuan. The influence of oil price is far greater than that of pork), and the overall profit will drop (the cost of oil will drop, but the impact of falling prices of all commodities in society will be greater, and the losses of enterprises will be greater, plus inventory. Excessive oil prices do more harm than good, and countries with excessive prices have subsidies.

I won't!

Please refer to the Measures for the Administration of Petroleum Prices for reasons.

The international oil price runs at a low price, but the domestic refined oil price is guaranteed, not less than 40 dollars, and domestic refineries can make normal profits.

In addition, China is the largest oil importer. In 20 19, China imported about 500 million tons of crude oil, with a total import value of about 24 132 billion US dollars. If the international oil price continues to operate at a low price, we can still save a lot of crude oil costs. But there will also be a problem, that is, imported oil is cheap, which will hit domestic oil exploration enterprises. At this time, the second provision of the above regulations will take effect, and a risk reserve for oil price regulation will be established. All the extra profits from imported oil below $40 will be included in this reserve, so oil companies will not be able to eat this part of the cake brought about by the fall in international oil prices.

So what is the function of this risk reserve?

This reserve will be deposited in a special account, which will be mainly used for energy conservation and emission reduction, improving oil quality and ensuring the safety of oil supply.

I think that the drop in international crude oil prices is not necessarily a good thing for domestic refining and chemical enterprises, and it needs specific analysis.

First of all, from the past experience, the plunge of refined oil prices is consistent with the change of crude oil prices in most cases, and based on the support of demand recovery, it can be judged that the decline of refined oil prices is lower than that of crude oil. However, when this part of low-priced crude oil can be used enough depends on the consumption rate of high-priced crude oil inventories in refineries and traders in the next period. At the same time, in order to cope with the problem of poor sales caused by inventory growth, refineries generally reduced their crude oil processing capacity. The social inventory situation is obviously different. However, the price of crude oil has fallen to the current level, which puts traders in an awkward position: there is very little idle inventory. What needs to be considered now is whether to continue to bargain-hunting, which will lead to insufficient inventory, excessive bargain-hunting in the early stage and no more idle funds on hand. I don't know whether it is "holding goods up" or "throwing goods to stop loss".

Looking at the profitability of refineries, many refineries have not finished processing the high-priced crude oil imported last year, and the processing cost is high, and the profitability is not optimistic; On the other hand, if spot crude oil is processed, refining profit will continue to rise. This means that the decline of refined oil is far less than that of spot. According to the spot price on March 9th, the refining profit has reached 1300 yuan/ton.

"If you control oil, you control the whole world economy; If you control the currency, you control the whole world. " It is also one of the reasons for Venezuela's economic crisis. You know, crude oil income accounts for almost 96% of Venezuela's foreign exchange sources. Once the sale of crude oil or the source of crude oil exchange is restricted, Venezuela's economy will fall into a liquidity dilemma. Now, things have changed again, and Venezuela's economic situation may get worse and worse.

In the era of global energy transformation, traditional oil countries themselves are also facing many challenges of new energy economy. At the same time, petrodollars have always been a big shackle of global oil countries. Once the US dollar opens all kinds of restrictions on oil countries, oil countries will face the possibility of not being able to exchange foreign exchange normally, such as Venezuela's economy mentioned earlier in this article and the restrictions imposed by the US dollar on Iran in the past few months. Therefore, or only by getting rid of the dependence on a single economic structure and saying no to petrodollars can the economy of oil countries avoid passivity.

Next, let's take a look at the crude oil market closely related to the international oil economy:

Crude oil dropped to 57 position twice on the hourly chart yesterday, but there was no breakthrough in the end. The upward pressure is obvious, and the lower part is temporarily supported by the 56 line, but this position is also crumbling. After falling below this position in early trading, you can be bearish! Crude oil is still a consolidation process of 56-57 at present, and only by completely and effectively breaking through this area can it enter the next trend! Operational suggestion: 56.8-57. 1 short, stop loss 0.4 points, target 56.3-55.9-55.5.

I think the long-term low oil price, coupled with China's unique protection policy of "the reserve price limit of refined oil below $40", is very unfavorable to refining enterprises.

Some people may ask, why is the oil price at the raw material end so low, but the price of refined oil remains unchanged, which is not good for refining enterprises?

And what about other chemicals besides refined oil? There is no reserve price protection policy.

The chemical industry has been overcapacity. If long-term low oil prices deliver profits to chemical enterprises in vain, the whole industry will not be able to compete healthily and will be eliminated. It is very unhealthy for the industry itself.

This is the biggest disadvantage.

I don't think this would be the case. Because China is still an importer of crude oil, its own crude oil is not enough. The low international crude oil price is a good thing for China refinery, because crude oil is cheap and the cost is low. Take advantage of the low price of crude oil now, import more crude oil and store it. Moreover, domestic refined oil prices are unlikely to plummet, so international crude oil prices have remained low, which has no bad influence on refineries, but can improve the profits of refineries.

On March 24th, the settlement price of Brent crude oil futures was 27. 15 USD/barrel, which was 40% lower than that when the "OPEC+"negotiations broke down on March 6th. Crude oil prices plummeted, will domestic oil refining enterprises have a better life?

Theoretically, the decline of international oil price is conducive to the decline of refining costs, which means the increase of corporate profits. But is this really the case?

What the hell is going on here?

Low-priced crude oil is still on the road.

The international crude oil price has fallen, the refining cost of local refining enterprises has decreased, and the refining profit has theoretically increased. But at present, this is not the case.

However, because Shandong refining enterprises are still digesting the high-cost crude oil purchased in the early stage, the actual refining profit is not optimistic at present.

Lin Yu (pseudonym), an oil industry insider who is familiar with Shandong refinery, also said that many refinery enterprises process the crude oil that arrived in Hong Kong in February last year and in 10 this year. Previously, affected by the epidemic, the operating rate of refining was low in February and March, and the market consumption was slow.

The wholesale price of refined oil continued to fall.

While waiting for low-priced crude oil, the lower wholesale price of refined oil also puts pressure on the profits of local refining enterprises.

According to Longzhong information data, in terms of wholesale, the benchmark price of Shandong refined oil on March 24th was 4,854 yuan/ton, which was 889 yuan/ton lower than that in March 1, with a decrease of 15.5%. The benchmark price of diesel oil is 5229 yuan/ton, which is 496 yuan/ton lower than that of 1 in March, with a decrease of 8.7%.

According to Zhuo Chuang's statistics, the average wholesale price (listing price) of Shandong refined gasoline was 50 10 yuan/ton on March 24th, which was 15.3% lower than that of 59 14 yuan/ton on March 24th. The average wholesale price (listing price) of diesel oil is 5266 yuan/ton, down 9.2% from 5797 yuan/ton in March 1.

Not only in Shandong, but also in the whole country, the wholesale price of refined oil is declining.

According to the information from the price monitoring center of the National Development and Reform Commission, the wholesale price index of Zhuochuang refined oil products has dropped for three consecutive weeks in March.

According to the latest data of Zhuochuang's national 70-city refined oil market price monitoring, the national wholesale price index of refined oil in the third week of March (March1June-March 20th) was 78.05 points (based on the week of1October 20th1kloc-0/,the base point was/kloc-0). The wholesale price index of diesel oil was 79.7 1 point, down 6.23 points from the previous month.

Multiple reasons affect the refined oil market.

Regarding the reasons for the price drop at the wholesale end, Yang Xia said that the delay in returning to work after the Spring Festival and the control measures in transportation and logistics made local refining enterprises accumulate some refined oil stocks in the early stage. Since then, it has faced a sharp drop in crude oil prices, which has caused an emotional blow to the refined oil market. Middlemen are still bearish on the price of crude oil in the market outlook and wait-and-see attitude on the overall purchase of refined oil, which puts pressure on the wholesale price of refined oil.

"In the past two weeks, the wholesale price of refined oil was chaotic." Lin Yu said that more than a week ago, some oil refining enterprises in Northeast China offered customers a low price of 4,650 yuan/ton to pre-sell refined oil. At that time, Shandong refining enterprises basically sold the spot at a price higher than 5200 yuan/ton.

The low-price pre-sale in Northeast China also puts pressure on Shandong refining. "At that time, I felt that the Northeast had fallen too much, and the spot price of the market did not need to fall so much. As a result, it was only over a week, and the Shandong refining fell to almost the same level. " Lin Yu said.

The continuous replenishment of positions makes the inventory of traders rise continuously. The above-mentioned traders said that some traders have replenished their stocks to a medium-high level some time ago, but the downstream demand is not particularly optimistic, so the pace of replenishing stocks is also slowing down.

"In the early stage, many traders shared the inventory pressure of refining enterprises, but in the end they still had to run out of refined oil. Now the downstream consumption power is not as strong as before, and traders are always unable to get the goods because of the low price, fearing the risk of explosion. " He said.

According to the data released by Longzhong Information on March 19, the social inventory in this week decreased by 1.62% compared with last week, maintaining the overall level of 30% to 60%. The data survey sample is the commercial oil depots of 2 social wholesale enterprises in China 102.

The overall price of crude oil plummeted, and the wholesale price dropped sharply from the beginning of the month. However, in the near future, we can also see that some local refining enterprises have raised the wholesale price.

From the data monitored by many institutions, it can be found that on March 20th, 24th and 25th, the wholesale listing prices of refined oil products of many local refining enterprises in China rose slightly, mostly between 1 10 yuan/ton 20 yuan.

Why is this?

Yang Xia said that the international oil price trend, demand and trading sentiment are all factors that affect the wholesale price of domestic refined oil products, and the recent price increase is related to the rebound of international oil prices. In March 19, the international oil price rose, and this favorable factor was immediately seized and amplified by enterprises, so domestic oil refining enterprises raised prices accordingly.

The above-mentioned traders also said that when the international oil price fell as a whole, the refinery raised the wholesale price of refined oil, which was actually a protection for traders who had placed orders before. He pointed out that for old customers, the increase in listing price does not mean the increase in transaction price, but there are still concessions. However, even if local refining enterprises give a big discount, traders will consider their current affordability.

Yang Xia emphasized that the wholesale price is affected by the fluctuation of international oil price, but it still depends on the demand side.

According to Jinlianchuang data monitoring, a few days ago, the planned export volume of refined oil products of state-owned enterprises flowed out one after another. Overall, the total export volume in April was 5.29 million tons, down 0.6 percentage points year-on-year.

The demand for refined oil is expected to increase.

The wholesale price is under pressure, which fails to stop the pace of local refining enterprises returning to work.

Longzhong information statistics show that in early March, Huang Yu Shi Sheng, Binyang Fuel Chemical, Qingyishan, Xinyue Chemical and Alliance Petrochemical began to resume production, and in mid-March, Shengxing Chemical, Changyi Petrochemical and Shenchi Petrochemical started construction. Only around March 20th, Zhenghe Petrochemical, Huaxing Petrochemical, Wanda Tian Hong Petrochemical and Wantong Petrochemical plan to start construction. It is estimated that by the end of March, the operating rate of atmospheric and vacuum distillation in Shandong Refinery will drop from the lowest point in mid-February to 33%.

Longzhong information pointed out that the operating rate will increase in the short term, and the output of refined oil will also increase substantially. It is estimated that the output of gasoline and diesel in Shandong will increase by at least one third in late March compared with the beginning of the month, and the pressure on the supply side will be prominent.

Lin Yu said that oil refining enterprises are speeding up production, and at the same time, they are speeding up the pace of importing crude oil. "Now they want to take advantage of cheap crude oil prices to buy more. The premise is that one must have money, one must digest crude oil stocks, and there is a place to put it. "

In Xu Lei's view, under the influence of the previous plunge in crude oil, refining has reduced the sales price to inventory in an all-round way, thus replacing high-inventory crude oil, and on the other hand, it has accelerated the pace of crude oil import. Spot or lock in the futures price of crude oil to reduce the cost of raw materials and offset the loss of the decline in sales profit of refined oil.

The above traders also believe that speeding up production and using low-priced international crude oil as soon as possible can release the current crude oil cost pressure in the next few months and reduce the comprehensive refining cost for inland refining enterprises for a period of time. "Although refining with high-priced oil is a loss at present, this part of the cost will be compensated after using low-priced oil in the future."

The supply side is under pressure, but according to the industry, demand will continue to increase in the second quarter, which will help improve the refined oil market. Yang Xia pointed out that with the recovery of domestic economic and social activities and the acceleration of resumption of production in the second quarter, the demand for refined oil will increase, the cost dividend of low-priced oil will appear, and the refining profits of local refining enterprises will improve in the second quarter.

Refineries are just oil processing enterprises, earning processing fees. Logically speaking, the level of international oil prices has little to do with refineries, but this is not the case.

First of all, China's oil refineries belong to the state, which not only process oil, but also undertake the task of exploiting oil. As we all know, although China is not an oil-poor country, many people can't get it back. Therefore, China's oil exploitation is completely self-sufficient and its dependence on foreign countries is as high as 70%. Therefore, in addition, the cost of oil exploitation in China is higher, slightly lower than that of shale oil in the United States. Therefore, international oil has been kept at the current low price, which will have a great impact on these enterprises. Coupled with the state holding, regardless of the oil price, mining is sustainable, and oil companies have no autonomy from mining volume to pricing. Therefore, international oil has been kept at the current low price, and domestic refineries will be hit hard, but one thing is certain, no matter how much they lose, they will not go bankrupt, because there are countries behind them.

Secondly, the international low oil price is because the epidemic has hit the demand side of oil, resulting in a decrease in demand. Here comes the problem. With the decrease of oil consumption, the processing capacity of the refinery has also decreased. Because there is less oil used downstream, the profit of the refinery is the product of the price difference and the output. Now that the output has decreased, the life of the refinery is naturally difficult.

Summary: Most refineries are oil exploration enterprises themselves. The cost of oil exploitation in China is too high, and low oil prices will cause a lot of losses. On the other hand, the epidemic has impacted the demand for oil, resulting in a decline in the output of refineries. Therefore, if the international oil continues to maintain the current low price, domestic refineries will face great difficulties.

This is not a problem as long as domestic vehicles have a large demand for fuel.