Low oil prices depress oil and petrochemical booms
Low oil prices depress oil and petrochemical booms
The oil and petrochemical industry is "shuddering" with international oil prices falling. According to market statistics, the growth of oil and petrochemical companies in the third quarter was significantly lower than the second quarter.
Industry insiders believe that the decline in oil prices will be difficult to reverse in the near term, or that it will continue until the first quarter of next year. As a result, oil companies' upstream exploration and mining profits will be significantly reduced, oil industry or differentiation, and the lower and lower middle and downstream refining and chemical industries should look at "price difference". But overall, the oil and petrochemical boom will be depressed by a weak oil price, and companies may need to take a tight squeeze.
The petrochemical industry
"The year-end bonus estimate is going to be halved!" Last Friday, global crude oil (64.40,-1.75,-2.65 percent) fell sharply, one oil company source said in a tongue-in-cheek comment to the China securities journal. "The increase in the consumption tax on oil products on Friday will be more detrimental to the company and may affect sales." "The person added.
China's big oil companies have seen a significant drop in profits as oil prices drop from $100 to $110 a barrel to $80 - $90 a barrel, according to cicc. In 2015, if the price was based on a sensitivity analysis of $85 / barrel, cnooc's net profit could fall 13 per cent when oil prices were at $80 a barrel, while petrochina cut its profit by 11 per cent. When oil prices fall further to $70 a barrel, cnooc's net profit is likely to be 40 per cent below $85 and 35 per cent for petrochina. The profit sensitivity of the downstream sinopec group may be lower than that of the two upstream assets.
"The downward trend in oil prices in the third quarter has been reflected in the performance of listed companies." Analysts at cicc said oil and petrochemical companies' quarterly growth in the third quarter was down significantly from the second quarter, from 23 percent in the second quarter to a decline of 8 percent.
However, downstream airlines and the shipping industry, which are clearly affected by the oil price, have improved markedly. Among them, the shipping sector increased by 234% in the second quarter to 489%, while the aerospace sector shrank sharply from 90% to 11%.
"Historically, the downward trend in oil prices has corresponded to the strength of the aviation and automotive sectors, and the petrochemical sector has performed poorly." Cicc research report pointed out that since 2008, A drop in oil prices has four obvious, aerospace and automotive industries mostly during A stock market made beyond the performance of the market, and the petroleum and petrochemical plate during this period are weak, running to lose the market. The H market is also a similar structural divergence.
Oil industry is expected to be divided
There are also oil equipment companies and oil companies linked to exploration and exploitation.
In general, high oil prices will allow oil companies to increase capital spending on exploration and development, increase demand for oil suits and oil equipment, and bring more orders to relevant companies. On the other hand, if international oil prices continue to slump and even further fall, the upstream capital expenditure of oil companies will be reduced correspondingly, and the life of oil and equipment suppliers will be less than that.
Cicc believes that future funding for oil companies in exploration, development and production stages could be even more variable, leading to an increase in oil clothing and equipment companies. Excellent private enterprises can draw on the advantages of the technology, efficiency and experience, and domestic oil group within the service team to form a new "symbiosis", at the same time, it may be more independently develop new customers at home and abroad.
For the refining industry, the drop in oil prices is the difference between the two. "While the drop in crude oil prices first means lower refinery costs, the reduction in cost will ultimately translate into real profits and the change in the sales of the terminals." Li hong, an analyst with the business society, told the China securities journal.
The personage inside course of study points out, although the domestic refined oil market price in a row, but affected by the factors such as macro economic downturn, the market overall light, combined with the oil consumption tax hike last Friday, lead consumers to higher costs for a long time, to a certain extent again on the already grim market, product sales remain under pressure.
The downstream chemical industry faces a similar situation. As with the refining industry, the key to the chemical industry's profit and loss is the "spread" between the rise and fall of product prices and the rise and fall of cost prices, li said. Cicc also believes that there are many chemical sub-sectors, with more oil price fall and more air impact, but overall, the benefits are more favorable, and the price of oil is down by $10, which contributes to 2% of the performance.
"International oil prices have recently or continued to decline until the first quarter of next year, unless the cartel convenes an emergency meeting to announce cutbacks." For a period of future oil prices, oil in the economic and technical institute, a senior analyst at Chen Rui believe that short-term despises oil prices can have the effect of inhibition of U.S. market share, and affect the shale oil production especially for the new project. Low oil prices need to last more than six months to see results, so the downturn is expected to continue until the first quarter of next year, after the second quarter or some reversal
