——Interview with Niuli, deputy director of the Economic Forecasting Department of the National Information Center Since 2003, the international oil price has skyrocketed for five consecutive years, from an average of more than 30 US dollars per barrel in 2003 to a one-hundred dollar mark in 2007. What are the reasons for the continuous soaring international oil prices? Will high oil prices continue in 2008? What impact does high oil price have on the oil and chemical industry? How should companies respond? At the 6th Petroleum Economics Symposium of the Beijing Petroleum Institute held on December 22, the reporter interviewed Niuli, deputy director of the Economic Forecasting Department of the National Information Center, on the above issues.
Reporter: What are the causes of the soaring oil prices in recent years?
Niu Li: There are several types of causes for soaring oil prices. The first is the demand-pull type, which is the core factor of the soaring oil price. There were two oil crises in the 1970s, and oil prices soared rapidly in a short period of time. The reason for the first soaring oil price is very clear - the Arab-Israeli war led the Middle East countries to impose oil embargoes on western countries led by the United States. The second time the soaring oil price was caused by the turmoil in Iran’s internal political situation, which led to a lack of oil supply; followed by the eight-year war between Iran and Iraq, the oil production of these two major oil-producing countries could not proceed normally. Since 2003, the global economic growth rate has remained at around 5%, which is much higher than the average level of the past 3%. In particular, the rapid economic growth of China and the United States has directly contributed to the global increase in demand for oil. The increase in global oil demand in 2004 was above 2.5 million barrels, which is higher than the average level of 1 million barrels in 1991-1999. Therefore, in addition to the abrupt interruption of oil supply in oil-producing countries, which will cause oil prices to rise, the strong growth of the world economy is also an important factor leading to higher oil prices.
The second is the supply restriction type. From the 1980s to the 1990s, it can be said that the era of low oil prices, oil prices generally fluctuated between 15 to 20 US dollars / barrel. Long-term low oil prices have caused major oil-producing countries to seriously underinvest in capacity in the oil industry. Moreover, most oil-producing countries are turbulent in political affairs and the investment risks are relatively high, leading to oil production not keeping pace with the needs of economic development. In recent years, the OPEC countries want to control oil quotas for their own interests. The non-OPEC countries have also greatly increased their control over oil resources because of their improved financial conditions. For example, Russia’s oil production is lower than expected, the nationalization of petroleum resources is occurring, and the refining capacity is insufficient. In Venezuela, the daily output of crude oil has dropped from 3 million barrels to less than 2 million barrels. On the contrary, some small Central Asian countries have seen a large increase in oil production, but because of their small absolute value, they do not have any effect.
The third is speculative speculation. That is, trillions of dollars of international hot money continue to hit the highly developed modern financial markets. Like the financial crisis in Southeast Asia ten years ago, it was the result of the continuous impact of international capital on the currency markets of Southeast Asian countries. Hot money has a skill in the current financial market. Oil is a strategic material. Any small factor that affects the market supply and demand can be amplified in the oil field.
The fourth is the depreciation of the dollar. Since 2003, the actual depreciation of the U.S. dollar against major currencies in the world has been around 25%. Among them, the actual depreciation of the U.S. dollar against the euro is more than 40%, the nominal depreciation rate is as high as 57%; the depreciation of the U.S. dollar against the Canadian dollar is about 37%; the U.S. depreciation of the pound against the pound is about 28%. At present, the international oil market is mainly settled in U.S. dollars, and the real income of each oil-producing country such as the Middle East has thus shrunk dramatically, so that they have allowed oil prices to rise.
There is also a terrorist booster. Many analysts regard the terrorist incident as the main cause of the rise in oil prices. This actually amplifies the effect of the terrorist incident.
Reporter: Please judge the trend of international oil prices in 2008.
Niu Li: The international oil price trend in 2008 will be affected by the following factors:
According to the judgment of relevant international organizations, the global economy should maintain a good momentum of growth next year. In general, the speed has slowed down this year. Among them, the U.S. economic growth has a series of risks and will slow down significantly; the EU’s economic growth exceeds expectations, the structural reform of the economy is very effective, the unemployment rate has dropped to the lowest level in 15 years, and the fiscal deficit accounts for less than 3%; Japan’s Economic growth has been decelerating due to deflationary factors; the economic growth momentum of developing countries such as China and India remains strong, but China’s double-digit growth for more than five consecutive years will slow down next year.
With the steady growth of the world economy, world oil demand will grow steadily. The International Energy Agency predicts that world oil production in 2008 will reach 87.8 million barrels per day, an increase of 2.1 million barrels per day, an increase of 2.5%; the US Energy Information Administration predicts that the world oil output in 2008 will be 87.16 million barrels per day. , an increase of 1.38 million barrels, an increase of 1.6%; OPEC expects that in 2008 the world oil production will be 8706 barrels / day, an increase of 1.32 million barrels / day, an increase of 1.54%. It is predicted that the largest increase in oil is in the Asia-Pacific region, which will reach 840,000 barrels per day, which is close to half of the world's increase. The oil prices in the Middle East have caused significant expansion of refining capacity due to the increase in recent years, and all of them are used for export. Europe and the United States are relatively balanced.
The world's oil supply will improve significantly next year. The U.S. Energy Information Administration predicts that global oil supply in 2008 will be 87.39 million barrels per day, an increase of 2.53 million barrels over the same period of last year, with a growth rate of 3%, and the growth rate will be faster. OPEC forecasts that non-OPEC oil supply is expected to increase by 1 million barrels per day, an increase of 2%. According to the forecast of the US Department of Energy, the world's remaining capacity will return to average in 2008 and will reach 2 million to 3 million barrels per day.
In order to ensure the needs of world economic development, OPEC plans to invest 120 billion US dollars in 2010 to start expanding its oil production capacity. The initial plan is to increase the daily crude oil production capacity from 31.7 million barrels in 2005 to 36.9 million barrels in 2010 (not including Iraq). At the same time, the OPEC countries will substantially expand their refining capacity and expand their daily refining capacity from 12.3 million barrels in 2006 to 17.7 million barrels in 2011, an increase of nearly 50%. Non-OPEC countries will also increase production by about 40%.
The Iranian nuclear issue is the biggest variable in international oil prices. According to BP Energy's statistics, Iran has proven reserves of 137.5 million barrels of oil, accounting for 11.4% of the world's total. It is second only to Saudi Arabia and ranks second in the world, with a storage-to-production ratio of 87:1; and a proven natural gas reserve of 257,800. Billion cubic meters, second only to Russia, ranks second in the world. At present, Iran is OPEC's second-largest oil-producing country, with more than 4 million barrels of oil per day, annual exports of oil reaching 120 million tons, and more than 60% of the oil exported to foreign countries. If there is a conflict in Iran, it will directly affect the world's oil supply.
The role of international hot money speculation cannot be ignored. Earlier this year, the position of crude oil futures on the New York Mercantile Exchange significantly decreased, and net short positions appeared. As a result, international oil prices experienced two significant dive. Every time the sharp fluctuations in international oil prices have the role of hot money, speculative speculation boosts the rise in oil prices. Next year is no exception.
The continued depreciation of the U.S. dollar has also pushed up oil prices to some extent. The US fiscal and trade deficits will not be eliminated in the short term, and the US dollar will remain weak for a long time. The depreciation of the U.S. dollar has actually reduced the real income of the oil dollar, which has prompted OPEC and other oil-producing countries to raise oil prices.
The U.S. election should also be focused. Republican lawmakers in the United States usually come from large oil consortia. After the Republican Party wins, it will default to high oil prices. Members of the Democratic Party came from relatively low- and middle-income groups. They have consistently advocated controlling international oil prices. The results of the US election next year will affect international oil prices.
Overall, global oil supply and demand are still in relative tension. Excluding uncertainties such as geopolitical risks and speculation, economic fundamentals will also support international oil prices to operate at high levels. If the Iranian nuclear issue and other geopolitical risks have not deteriorated significantly and major emergencies do not occur, the annual average price of international oil prices will be around US$75 per barrel. However, if there is a military conflict between Iran and U.S. due to a nuclear issue, international oil prices will soar in the short term; if the world economy slows down significantly due to the U.S. economy's recession, international oil prices may drop sharply.
Reporter: What impact do you think high oil prices have on China's oil and chemical industry?
Niu Li: First of all, it impacted China's refined oil market. As the international oil prices continue to soar, and we can afford to keep up with the pace of soaring crude oil, leading to significantly inverted crude oil and refined oil prices. Against this background, some private refineries are not enthusiastic. When crude oil prices approached 100 US dollars, they stopped production and the two major groups suffered losses. There are many problems in the oil refinery companies that are in competition with the current policies, which leads to many problems in the supply of refined oil products. If not handled properly, they will cause other social problems.
Secondly, high oil prices have increased the company's production costs, and the upstream and downstream companies are suffering from inequality. Upstream oil exploration companies have obtained huge profits. Therefore, a special income of RMB 60 billion will be collected throughout the year. The refining sector is losing money. This is a price mechanism issue. The industries that use more petroleum (product oil) are agriculture and fishery. The two industries cannot digest the oil price increase factor, and they must be included in the production cost. For example, the raw materials for diesel and fertilizer used in agricultural machinery mainly come from petroleum. In addition, the cost of films and pesticides will also increase. For the petrochemical industry, petrochemical upstream companies are also okay because the degree of prosperity of petrochemical products is closely related to oil, and even to the front of oil, petrochemical products tend to rise more than oil. However, the downstream companies in the petrochemical industry are often close to consumer terminals because their products are mostly close to consumer terminals.
Reporter: In response to high oil prices, what measures should we take?
Niu Li: First of all, it should actively introduce the fuel tax policy. In the future, the growth of China's oil demand is very fast, and it cannot be guaranteed at home. Although it is theoretically impossible to use petroleum resources for 40 years, it is difficult for you to go for it. It cannot be the same as the advanced countries that can do so in the international market. Therefore, we must get rid of departmental barriers and resolutely and decisively introduce fuel tax policies.
Second, we must break the monopoly of the industry and promote the reform of the oil market circulation system. There are several aspects of monopoly performance. First, there is a monopoly of import rights. At present, only two companies have import rights, and other companies do not. Secondly, they do not have the right to refine after import. Even if they do not have the right to wholesale, they cannot get the sales link. oil. This issue is still very serious.
The third is to improve the pricing mechanism and gradually realize the market-oriented pricing of refined oil. At the same time, we must speed up institutional innovation and comprehensively promote the construction of an oil reserve system. This system more to respond to supply disruptions or emergencies, is not used to stabilize the market.
Reporter: What are the causes of the soaring oil prices in recent years?
Niu Li: There are several types of causes for soaring oil prices. The first is the demand-pull type, which is the core factor of the soaring oil price. There were two oil crises in the 1970s, and oil prices soared rapidly in a short period of time. The reason for the first soaring oil price is very clear - the Arab-Israeli war led the Middle East countries to impose oil embargoes on western countries led by the United States. The second time the soaring oil price was caused by the turmoil in Iran’s internal political situation, which led to a lack of oil supply; followed by the eight-year war between Iran and Iraq, the oil production of these two major oil-producing countries could not proceed normally. Since 2003, the global economic growth rate has remained at around 5%, which is much higher than the average level of the past 3%. In particular, the rapid economic growth of China and the United States has directly contributed to the global increase in demand for oil. The increase in global oil demand in 2004 was above 2.5 million barrels, which is higher than the average level of 1 million barrels in 1991-1999. Therefore, in addition to the abrupt interruption of oil supply in oil-producing countries, which will cause oil prices to rise, the strong growth of the world economy is also an important factor leading to higher oil prices.
The second is the supply restriction type. From the 1980s to the 1990s, it can be said that the era of low oil prices, oil prices generally fluctuated between 15 to 20 US dollars / barrel. Long-term low oil prices have caused major oil-producing countries to seriously underinvest in capacity in the oil industry. Moreover, most oil-producing countries are turbulent in political affairs and the investment risks are relatively high, leading to oil production not keeping pace with the needs of economic development. In recent years, the OPEC countries want to control oil quotas for their own interests. The non-OPEC countries have also greatly increased their control over oil resources because of their improved financial conditions. For example, Russia’s oil production is lower than expected, the nationalization of petroleum resources is occurring, and the refining capacity is insufficient. In Venezuela, the daily output of crude oil has dropped from 3 million barrels to less than 2 million barrels. On the contrary, some small Central Asian countries have seen a large increase in oil production, but because of their small absolute value, they do not have any effect.
The third is speculative speculation. That is, trillions of dollars of international hot money continue to hit the highly developed modern financial markets. Like the financial crisis in Southeast Asia ten years ago, it was the result of the continuous impact of international capital on the currency markets of Southeast Asian countries. Hot money has a skill in the current financial market. Oil is a strategic material. Any small factor that affects the market supply and demand can be amplified in the oil field.
The fourth is the depreciation of the dollar. Since 2003, the actual depreciation of the U.S. dollar against major currencies in the world has been around 25%. Among them, the actual depreciation of the U.S. dollar against the euro is more than 40%, the nominal depreciation rate is as high as 57%; the depreciation of the U.S. dollar against the Canadian dollar is about 37%; the U.S. depreciation of the pound against the pound is about 28%. At present, the international oil market is mainly settled in U.S. dollars, and the real income of each oil-producing country such as the Middle East has thus shrunk dramatically, so that they have allowed oil prices to rise.
There is also a terrorist booster. Many analysts regard the terrorist incident as the main cause of the rise in oil prices. This actually amplifies the effect of the terrorist incident.
Reporter: Please judge the trend of international oil prices in 2008.
Niu Li: The international oil price trend in 2008 will be affected by the following factors:
According to the judgment of relevant international organizations, the global economy should maintain a good momentum of growth next year. In general, the speed has slowed down this year. Among them, the U.S. economic growth has a series of risks and will slow down significantly; the EU’s economic growth exceeds expectations, the structural reform of the economy is very effective, the unemployment rate has dropped to the lowest level in 15 years, and the fiscal deficit accounts for less than 3%; Japan’s Economic growth has been decelerating due to deflationary factors; the economic growth momentum of developing countries such as China and India remains strong, but China’s double-digit growth for more than five consecutive years will slow down next year.
With the steady growth of the world economy, world oil demand will grow steadily. The International Energy Agency predicts that world oil production in 2008 will reach 87.8 million barrels per day, an increase of 2.1 million barrels per day, an increase of 2.5%; the US Energy Information Administration predicts that the world oil output in 2008 will be 87.16 million barrels per day. , an increase of 1.38 million barrels, an increase of 1.6%; OPEC expects that in 2008 the world oil production will be 8706 barrels / day, an increase of 1.32 million barrels / day, an increase of 1.54%. It is predicted that the largest increase in oil is in the Asia-Pacific region, which will reach 840,000 barrels per day, which is close to half of the world's increase. The oil prices in the Middle East have caused significant expansion of refining capacity due to the increase in recent years, and all of them are used for export. Europe and the United States are relatively balanced.
The world's oil supply will improve significantly next year. The U.S. Energy Information Administration predicts that global oil supply in 2008 will be 87.39 million barrels per day, an increase of 2.53 million barrels over the same period of last year, with a growth rate of 3%, and the growth rate will be faster. OPEC forecasts that non-OPEC oil supply is expected to increase by 1 million barrels per day, an increase of 2%. According to the forecast of the US Department of Energy, the world's remaining capacity will return to average in 2008 and will reach 2 million to 3 million barrels per day.
In order to ensure the needs of world economic development, OPEC plans to invest 120 billion US dollars in 2010 to start expanding its oil production capacity. The initial plan is to increase the daily crude oil production capacity from 31.7 million barrels in 2005 to 36.9 million barrels in 2010 (not including Iraq). At the same time, the OPEC countries will substantially expand their refining capacity and expand their daily refining capacity from 12.3 million barrels in 2006 to 17.7 million barrels in 2011, an increase of nearly 50%. Non-OPEC countries will also increase production by about 40%.
The Iranian nuclear issue is the biggest variable in international oil prices. According to BP Energy's statistics, Iran has proven reserves of 137.5 million barrels of oil, accounting for 11.4% of the world's total. It is second only to Saudi Arabia and ranks second in the world, with a storage-to-production ratio of 87:1; and a proven natural gas reserve of 257,800. Billion cubic meters, second only to Russia, ranks second in the world. At present, Iran is OPEC's second-largest oil-producing country, with more than 4 million barrels of oil per day, annual exports of oil reaching 120 million tons, and more than 60% of the oil exported to foreign countries. If there is a conflict in Iran, it will directly affect the world's oil supply.
The role of international hot money speculation cannot be ignored. Earlier this year, the position of crude oil futures on the New York Mercantile Exchange significantly decreased, and net short positions appeared. As a result, international oil prices experienced two significant dive. Every time the sharp fluctuations in international oil prices have the role of hot money, speculative speculation boosts the rise in oil prices. Next year is no exception.
The continued depreciation of the U.S. dollar has also pushed up oil prices to some extent. The US fiscal and trade deficits will not be eliminated in the short term, and the US dollar will remain weak for a long time. The depreciation of the U.S. dollar has actually reduced the real income of the oil dollar, which has prompted OPEC and other oil-producing countries to raise oil prices.
The U.S. election should also be focused. Republican lawmakers in the United States usually come from large oil consortia. After the Republican Party wins, it will default to high oil prices. Members of the Democratic Party came from relatively low- and middle-income groups. They have consistently advocated controlling international oil prices. The results of the US election next year will affect international oil prices.
Overall, global oil supply and demand are still in relative tension. Excluding uncertainties such as geopolitical risks and speculation, economic fundamentals will also support international oil prices to operate at high levels. If the Iranian nuclear issue and other geopolitical risks have not deteriorated significantly and major emergencies do not occur, the annual average price of international oil prices will be around US$75 per barrel. However, if there is a military conflict between Iran and U.S. due to a nuclear issue, international oil prices will soar in the short term; if the world economy slows down significantly due to the U.S. economy's recession, international oil prices may drop sharply.
Reporter: What impact do you think high oil prices have on China's oil and chemical industry?
Niu Li: First of all, it impacted China's refined oil market. As the international oil prices continue to soar, and we can afford to keep up with the pace of soaring crude oil, leading to significantly inverted crude oil and refined oil prices. Against this background, some private refineries are not enthusiastic. When crude oil prices approached 100 US dollars, they stopped production and the two major groups suffered losses. There are many problems in the oil refinery companies that are in competition with the current policies, which leads to many problems in the supply of refined oil products. If not handled properly, they will cause other social problems.
Secondly, high oil prices have increased the company's production costs, and the upstream and downstream companies are suffering from inequality. Upstream oil exploration companies have obtained huge profits. Therefore, a special income of RMB 60 billion will be collected throughout the year. The refining sector is losing money. This is a price mechanism issue. The industries that use more petroleum (product oil) are agriculture and fishery. The two industries cannot digest the oil price increase factor, and they must be included in the production cost. For example, the raw materials for diesel and fertilizer used in agricultural machinery mainly come from petroleum. In addition, the cost of films and pesticides will also increase. For the petrochemical industry, petrochemical upstream companies are also okay because the degree of prosperity of petrochemical products is closely related to oil, and even to the front of oil, petrochemical products tend to rise more than oil. However, the downstream companies in the petrochemical industry are often close to consumer terminals because their products are mostly close to consumer terminals.
Reporter: In response to high oil prices, what measures should we take?
Niu Li: First of all, it should actively introduce the fuel tax policy. In the future, the growth of China's oil demand is very fast, and it cannot be guaranteed at home. Although it is theoretically impossible to use petroleum resources for 40 years, it is difficult for you to go for it. It cannot be the same as the advanced countries that can do so in the international market. Therefore, we must get rid of departmental barriers and resolutely and decisively introduce fuel tax policies.
Second, we must break the monopoly of the industry and promote the reform of the oil market circulation system. There are several aspects of monopoly performance. First, there is a monopoly of import rights. At present, only two companies have import rights, and other companies do not. Secondly, they do not have the right to refine after import. Even if they do not have the right to wholesale, they cannot get the sales link. oil. This issue is still very serious.
The third is to improve the pricing mechanism and gradually realize the market-oriented pricing of refined oil. At the same time, we must speed up institutional innovation and comprehensively promote the construction of an oil reserve system. This system more to respond to supply disruptions or emergencies, is not used to stabilize the market.