Oil Market Price Analysis in the First Quarter of 2004

Entering 2004, the international and domestic oil market continues to be hot. In January 2004, the average price of the three major crude oils averaged 31.89 U.S. dollars, an increase of 0.51 U.S. dollars from the previous month and a slight drop of 0.34 U.S. dollars from the same period of the previous year. The main reason was that the abnormally high Minas crude oil decreased by 1.9 U.S. dollars per barrel. Significantly improved; gasoline and diesel prices in the three markets were US$41.95 and US$40.57 per barrel respectively, up by US$4.7 and US$3.16 from last month, up by 13% and 9% respectively, and up by US$5.91 and 4.3 over the same period of the previous year. Dollars. In the country's multi-energy adjustment of coal and electricity, the domestic oil market has eased. However, due to the high international oil prices, the domestic refined oil market did not experience the situation of falling prices in the off-season, and the oil prices remained high. The average wholesale price of gasoline in January was 3,785 yuan per ton, roughly the same as last month; the wholesale price of diesel was 3,390 yuan per ton, an increase of 30 yuan from the previous month. Compared with the same period of last year, gasoline and diesel were RMB 242 and RMB 125 per ton, respectively, and they continued to maintain a prosperous situation of buying and selling. Good factors: The high oil prices since the fourth quarter of 2003 have certain speculative factors, especially the international oil prices, which are clearly undermined by uncertainties such as the constant terrorist attacks, unstable production in Iraq and uncertain winter demand. However, the basic factors supporting oil prices still exist objectively, and the positive factors are still greater than the negative ones. The recovery of the world economy is strong and the oil demand situation is generally optimistic. The World Bank and the International Monetary Fund predict that in 2004 the world economy will increase by one percentage point from 2003. The International Energy Agency adjusted its demand growth in 2004 to 1.16 million barrels per day in December 2003. At present, Europe and the United States have low crude oil inventories. The U.S. Energy Information Administration (EIA) reported that on January 23, US crude oil stocks stood at 263.7 million barrels, down 9.6 million barrels from the same period of last year, which was lower than the US Petroleum Council’s 2.7 billion barrel-stock emergency. Although in the latter part of January, US crude oil imports reached 10.5 million barrels a day, on the 6th of February its crude oil inventories were still 268.9 million barrels. In particular, Japan’s economy has reached a low point and its impact on the world economy has increased. In particular, the pull on China’s exports will increase. The United States will not change its policy of maintaining high oil prices so as to facilitate the reconstruction of Iraq and its own energy security. However, in order to stabilize the world's oil market and prices, the United States does not want the oil price to be too high, and the market is too turbulent and out of control. The key to the direction of oil prices depends on how the United States coordinates its relations with OPEC’s oil-producing countries. Opel Carr’s limit on the production price limit kept the oil supply string tight. Despite the difficulty in producing high oil prices, OPEC has repeatedly emphasized that the world's oil supply is adequate, and is very worried about the drop in oil prices. It has always maintained a sense of urgency in the global oil market and is cautious about increasing production. The decision to reduce production at high oil prices on February 10th saw the pressure of excess resources on oil prices and avoid the possibility of a sharp drop in oil prices. All parties have a clearer consensus on the level of oil prices and the future situation. In the Clinton administration, the United States believed that the price of crude oil was $28 per barrel. The Russian oil minister believes that crude oil prices higher than 25 US dollars per barrel will harm consumer interests. OPEC Chairman Atia also said that the average price of 25 US dollars per barrel of OPEC is reasonable for both crude oil producers and consumers. On February 9, the Saudi oil minister stated that he expects a basket price of US$25 per barrel. In view of this factor, Brent crude should be a base price of US$25 per barrel. The depreciation of the US dollar made it more and more supportive of oil prices. Compared with the beginning of last year, the exchange rate of the US dollar against the euro is currently reduced by about 15% and the Japanese yen by 10%. As for the current Brent crude oil price of US$30 per barrel, if it is converted into Euro valuation, it is only equivalent to about US$25 in the same period of last year. Saudi officials stated that the devaluation of the US dollar has caused oil-producing countries to suffer a certain degree of damage. The current price of oil is a correct price. China's national economy has entered a new phase of rapid development. After 10 years of adjustment, the Party Central Committee and the State Council focused on expanding domestic demand, and achieved initial results from anti-inflation to anti-deflation. The Central Economic Work Conference proposed that China’s current economic development is at a rising stage of the economic cycle, and requires good protection, guidance, and enthusiasm for accelerating development in all aspects. In the fourth quarter of 2003, China’s GDP growth rate was as high as 9.9%. The inertia of high-speed development will play a huge role in promoting the socio-economic development this year. Therefore, the refined oil market will continue to maintain the momentum of purchase and sales. In particular, China has entered the stage of heavy chemical industry and its energy demand is very strong. After the Spring Festival, the country’s industrial and agricultural production from south to north will be fully launched, and the demand for refined oil will be further restored. In the fourth quarter of 2003, the country’s refined oil resources continued to be tight, and the inventory of PetroChina and Sinopec was low. On the one hand, the supply capacity of the market is limited, on the other hand, the absorption of production is enhanced and there is room for a strong excess of adjustment. In this case, the inventory of social business units is also lower. International oil prices remain high, and domestic oil prices are in a state of price increase. The domestic refined oil market has a relatively relaxed price policy environment. If the international oil price does not drop significantly, that is, the current average price of gasoline and diesel in the three places will drop by more than US$5 per barrel for US$40 and US$38, there will be no downward adjustment of prices. The high price will remain. The international oil prices remain at a relatively high price, which will still have a certain inhibitory effect on domestic resources. At present, the domestic average price of domestic gasoline and diesel products is still lower than the FOB price of the Singapore market, which is lower than the average import duty of neighboring countries by around 320 yuan per ton. This not only results in pressure on production, but also limits imports. In January, the supply of refined oil in the Asian market was tightening, which was mainly due to the high cost of crude oil, the low refining profit, and the obstruction of some refineries. Negative effects: The international oil prices remain high, promote production, and the world oil market oversupply. In January 2004, the output of 10 countries of OPEC was 1 million barrels higher than that in December 2003, 1.5 million barrels more than its daily production limit. For the crisis of oversupply, OPEC is very clear and very sensitive. However, in order to ensure that the market share does not decrease, too much to maintain high oil prices through the production paradox, but did not really achieve reductions. How long this practice can be maintained is worthy of attention. The oil production in Iraq, which has been weighed against the high international oil prices, is increasing. Iraq’s reconstruction work has been carried out with the participation of the international community and its oil production has also been growing rigidly. Reuters survey, in January 2004 its daily output reached 2.04 million barrels. The recovery of Iraq’s oil production is not in the distant future. Although the international oil price has declined since late January, the level is still high. The OPEC basket of oil prices has never been below the upper limit of US$28 per barrel. Brent crude oil has been at a high of around US$30 per barrel. Domestic gasoline prices have also reached the highest point in several years. The upward pressure on international and domestic oil prices has increased, and there is pressure from the top down. Future forecast: Recently, the international oil price has dropped. On the one hand, the normal adjustment of high prices; on the other hand, with the end of the winter, there is not much time for heating oil demand in the season and the space for speculation is shrinking. However, the speculation factors such as terrorist attacks and Iraq’s unstable production are difficult to disappear for a time. In particular, OPEC has been manufacturing around the limited production price insurance price insurance. Therefore, not only does the underlying objective of supporting oil prices exist, there is also a certain market for speculation and speculation. The overall trend of international oil prices in 2004 should be stable, but not significantly. In the first quarter of 2004, the maintenance of the oil price level should be normal. In terms of Brent crude oil, it should generally be above 28 US dollars per barrel in February, and it is also possible to maintain around 28 dollars per barrel in March. It will not affect the reduction of domestic oil prices. Starting in the second quarter, if OPEC’s production is out of control and continues to over-produce, oil prices may decline. However, considering the U.S. policy of insured price and OPEC's own fundamental interests, it is unlikely that the price of oil will fall below 25 U.S. dollars for several days. In view of the fact that after the Spring Festival, the demand for domestic refined oil market will be in recovery, and the price of diesel oil is still above the order price, domestic oil prices should be firmer by the beginning of April. What needs to be emphasized is that although the current national petrol wholesale price stipulated by the State Policy is relatively high at RMB 3,800 per ton, this level can basically be maintained in the first quarter. Because, since December last year, crude oil prices have generally been around US$30 per barrel, and the cost of processing imported crude oil is relatively high. The current stipulated diesel wholesale price is still low at 3,400 yuan per ton, and there is room for growth. After the second quarter, with the multi-lateral regulation of the domestic energy market and rising water levels, the energy supply situation will improve. Whether domestic oil prices can come down depends critically on international oil prices in late March. By then, if the domestic market is still relatively stable, and the international oil price drops to about 25 US dollars per barrel, the decline in domestic oil prices will be taken for granted.

Size 10

Component series 1X

Maximum operating pressure 350 bar

Maximum flow 40 l/min

Direct operated directional seat valve with solenoid actuation

Porting pattern according to ISO 4401-05-04-0-05 and NFPA T3.5.1 R2-D05

Subplates (separate order)

Blocked connection is leak-tight

Reliable switching when under pressure over longer periods of standstill

Wet-pin DC solenoids with detachable coil (AC voltage possible by means of a rectifier)

Solenoid coil is rotatable by 90°

The coil can be changed without having to open the pressure-tight chamber

Electrical connection as individual connection

With concealed manual override, optional

Inductive position switch and proximity sensors (contactless)

Directional Valve

Directional Valve,Directional Spool Valves,Directional Seat Valves,High-Response Directional Valves,Directional Servo-Valves

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