汇丰银行-全球-石油与天然气行业-关注研究问题：需求驱动的石油市场但供应问题正在回归-2019.6.24-23页 (2).pdf

Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:HSBC Bank plc View HSBC Global Research at:https:/ Demand concerns have been dominating oil market sentiment until recently but the balance is set to tighten against a backdrop of rising geopolitical uncertainty We mark to market our FY19e Brent price to USD66.5/b vs USD67.0 previously.2020e/21e unchanged at USD70/b For most of the past five years oil market dynamics have been mostly supply-driven but in recent weeks demand concerns have been more dominant,driven by a run of unusually large builds in US inventories and concerns over broader demand growth.Supply issues havent gone away and outside the US,the market remains tight as shown in the strong backwardation in the front end of the Brent futures curve.We would expect to see more signs of this tightness emerging in the next few months:OECD demand was weak in 1Q but we are now seeing a sharp seasonal increase,with 2H global demand likely to be a good 1.5mbd above 1H OPEC cuts voluntary and involuntary-have taken 2m of supply off the market since November.We expect a rollover of the current OPEC+agreement in early July.Iranian exports have fallen sharply,and supply looks set to follow as its storage capacity becomes full.While we expect OPEC members Saudi Arabia and the UAE to compensate with additional volumes,we detect no signs that this will be contemplated until there are much clearer signs of the market tightening Even with strong growth in non-OPEC supply this year led by 1.6mbd of forecast growth in the US we expect to see significant declines in global inventories in the coming months,lending further support to prices The recent escalation in political tension in the Middle East adds substantially to potential supply-side risks.We have been surprised by the relative lack of crude price response to some of these events until just recently,which probably reflects the prevailing sentiment of a market in oversupply.The fact that a fifth of global crude supply transits the Straits of Hormuz daily,and virtually all of global spare capacity lies in the Middle East,makes any pre-judgement of the implications of any further escalation impossible.However,the tightening of supply/demand balances in the coming months is likely to only heighten the market focus on these geopolitical risks unless they abate.We have marked-to-market our 2Q Brent price assumption to USD68.3/b(vs USD70.5/b)to reflect QTD actuals.Our other assumptions remain unchanged,for Brent to average USD67/b in 3Q and 4Q19e,and USD70/b in 2020e/2021e.24 June 2019 Gordon Gray*Global Head of Oil and Gas Equity Research HSBC Bank plc +44 20 7991 6787 Charles Swabey*Analyst HSBC Bank plc +44 20 3268 3954 Kim Fustier*Analyst,Oil&Gas HSBC Bank plc +44 20 3359 2136 Thomas C.Hilboldt*,CFA Head of Resources&Energy Research,Asia Pacific The Hongkong and Shanghai Banking Corporation Limited .hk+852 2822 2922 *Employed by a non-US affiliate of HSBC Securities(USA)Inc,and is not registered/qualified pursuant to FINRA regulations Oil Things Considered Multi-Asset Global A demand-driven oil market,but supply issues are returning Multi-Asset Global 24 June 2019 2 In recent weeks oil market sentiment has been mostly demand driven,coming under pressure from concerns on a weaker global demand outlook,as well as weak US inventory data:US commercial inventories have risen by nearly 90mb(1mbd)since end-March as a result of surging domestic supply and weak demand.Latest data shows commercial stocks 6%above their five-year average,vs only 1-2%two months ago Meanwhile,concerns over global economic growth have seen estimates of 2019 oil demand reduced again by several agencies including the IEA,OPEC and the US EIA The underlying oil market picture is by no means that negative,and looks set to get tighter:The front end of the Brent and WTI futures curves contrast markedly.WTI is in contango,suffering from a US domestic market with stagnant demand and surging production,and WTI trades at a USD8/b discount vs Brent.Brent futures are firmly in backwardation.While this partly reflects the shortage of Russian exports since the recent contamination issue,it also highlights the tightness of the physical supply/demand balance outside the US.While 1Q inventory builds reflected weak demand,we are set to see a strong seasonal rise in demand in the coming months,with 2H19 global demand 1.5mbd higher than in 1H.We forecast global demand growth of 1.0mbd for FY19e vs consensus of the order of 1.2mbd OPEC looks set to meet in early July,and all indications point to a rollover of its existing agreement.Current OPEC production is well below even the agreed levels,and Iranian supply looks set to fall further in the coming months as its available storage becomes filled.While we expect key producers Saudi Arabia and the UAE to raise production over time to compensate for this,we see no indication that they will do so pre-emptively before seeing much clearer signs that the market is tightening again We see US supply growing by 1.6mbd in 2019e,and total non-OPEC supply up by 2.1mbd.Despite this growth,we expect a combination of continued OPEC restraint and seasonally stronger demand to reverse the recent inventory builds and lead to some sizeable stock draws over the coming months,supporting prices In our view the crude markets response to the recent increase in geopolitical uncertainty specifically around events in the Straits of Hormuz has until very recently been remarkably muted.This lack of response underlines the degree to which the oil market is perceived as oversupplied,and sentiment has been predominantly demand-driven.The tightening of the market in the coming months could well bring the markets focus back to supply issues,heightening the focus on these geopolitical risks considerably.Oil things considered Demand concerns dominating oil market sentiment until recently but the supply/demand balance looks set to tighten We mark to market our FY19e Brent price to USD66.5/b vs USD67.0 previously.2020e/21e unchanged at USD70/b 3 Multi-Asset Global 24 June 2019 The crude market in six charts Brent futures are in backwardation,WTI remains in contango(futures curves,USD/b)US inventories surged in 2Q(commercial inventories,excess vs five-year average,mb and%)Source:Bloomberg,HSBC Source:Bloomberg,HSBC Source:IEA,OPEC Source:IEA,OPEC OPEC supply is down 2.4mbd since November(mbd)A tightening inventory picture in the next few months(quarterly inventory change,mbd)Source:EIA,HSBC Source:EIA,HSBC Source:INSERT SOURCE TEXT HERE 5052545658606264660612182430Contract monthBrentWTI-40.0-20.00.020.040.060.080.0JanMarMayJulSepNov-5%-3%-1%1%3%5%7%9%2018 Act vs 5yAvg(%)2019 Act vs 5yAvg(%)2018 Act vs 5yAvg(mb)2019 Act vs 5yAvg(mb)0.81.01.21.41.61.8Jun-18Jul-18Aug-18Sep-18Oct-18Nov-18Dec-18Jan-19Feb-19Mar-19Apr-19May-19Jun-19IEAOPECIEA 2020e97989899991001001011011021021Q2Qe3Qe4QeIEAOPEC32.329.9-1.33-0.55-0.44-0.21-0.06-0.00 0.07 0.10 28.028.529.029.530.030.531.031.532.032.533.0Nov-18S.ArabiaIranVenez.UAEKuwaitOtherLibyaIraqMay-19-1.5-1.0-0.50.00.51.01.520182019eQ1Q2Q3Q4Demand growth forecasts have been falling(IEA and OPEC estimates of 2019 global oil demand growth,mbd)Demand is seeing a sharp seasonal rise in 2Q/3Q(IEA and OPEC estimates of 2019e demand,mbd)Multi-Asset Global 24 June 2019 4 Crude prices Brent backwardation points to underlying tightness After rallying for the first four months of 2019,Brent fell sharply in recent weeks from its late April high of USD74/b.Despite OPEC cuts,rising political uncertainty and several supply disruptions,weak US data and softening demand have had a dominant effect on crude prices.The front end of the Brent curve remains in steep backwardation(see opposite),with a 1 month/4 month premium of USD3/b.This is down from a peak of over USD5/b in late May.The strong premium for prompt delivery reflects a tight physical market,supported by short-term supply outages such as pipeline contamination of Russian crude.In contrast,the front end of the US futures curve is in contango,illustrating a much softer US market as seen in EIA data over recent weeks.The disparity in the two futures curves is a sign that the US weekly data is not reflective of the wider global supply/demand picture.Non-commercial(speculative)investors have reduced net long exposure to both WTI and Brent crude contracts significantly since early May,adding to the pressure on markets.Latest data shows speculative net long positions down 28%from the recent peak in Brent futures,and 59%in WTI.The ratio of speculative long to short positions reached a 2019 high at the start of May and has continued to track the shape of the futures curve as we previously noted(see Fuel for thought:Oil in a multi-asset context,25 April 2019).In the US,the price discount of landlocked WTI Cushing(the historical US benchmark)vs Brent has averaged USD9/b year to date.The Oklahoma storage hubs crude stocks have more than doubled since September 2018,as infrastructure struggled to keep up with rising production.The start-up of the Sunrise pipeline from the Permian to Cushing helped shift Permian bottlenecks to Cushing,but the startup of 2.2mbd of new Permian-to Gulf Coast pipelines should ease pressure at Cushing in next few quarters.Price differentials between higher and lower quality crudes have been a big talking point for the market over recent months(see Oil market outlook:Molecule mismatch 7 June 2019).Looking at Gulf Coast pricing,the premium paid for the US produced Louisiana Light Sweet(LLS)vs Maya(Mexican heavy)has narrowed from USD7/b in May to USD3/b in June,highlighting the tightness in the heavier crude markets.Canadian crudes continue to trade at a steep discount to WTI Cushing as a result of severe logistical(pipeline)constraints.We have marked to market our 2Q19 Brent price forecast from USD70.5/b to USD68.3/b,taking our FY19 assumption down from USD67.0 to USD66.5/b.We still assume a price of USD67/b in 3Q/4Q19,reflecting the underlying tightness in the global market,and a longer term forecast of USD70/b.The current Bloomberg consensus is USD69/b for 2020-21e.HSBC oil and gas price assumptions Annual average 2016 2017 2018 2019e 2020e 2021e 2022e Brent USD/b 45.1 54.8 71.6 66.5 70.0 70.0 71.4 WTI USD/b 43.4 50.9 64.8 59.1 66.0 68.0 69.4 Nymex gas USD/mBtu 2.49 2.96 3.07 2.80 3.00 3.25 3.32 UK spot gas USD/mBtu 4.7 5.8 7.9 5.7 6.9 7.3 7.6 Quarterly average 2Q18 3Q18 4Q18 1Q19 2Q19e 3Q19e 4Q19e Brent USD/b 75.0 75.8 68.3 63.7 68.3 67.0 67.0 WTI USD/b 67.9 69.5 59.0 54.7 59.8 61.0 61.0 Nymex gas USD/mBtu 2.83 2.9 3.7 2.9 2.5 2.8 3.0 UK spot gas USD/mBtu 8.6 8.6 9.0 6.3 4.5 5.0 7.0 Source:Refinitiv Datastream,HSBC assumptions 5 Multi-Asset Global 24 June 2019 Brent and WTI crude prices past two years,USD/bbl ICE Brent and NYMEX WTI-Futures and Options positioning by speculative traders(Managed Money),000 contracts Source:Bloomberg Source:Refinitiv Datastream Brent and WTI futures curves,USD/b Brent and NYMEX WTI crude futures:1month-4month spread,USD/b Source:Refinitiv Datastream Source:Bloomberg WTI-Brent crude price spread,USD/bbl WTI Houston,Permian Midland and Western Canadian Select-premium/discount vs WTI Cushing,USD/b Source:Bloomberg Source:Bloomberg 405060708090Jun-17Oct-17Feb-18Jun-18Oct-18Feb-19Jun-19BrentWTI0100200300400500600700Jan-15Jan-16Jan-17Jan-18Jan-19NYMEX WTIICE Brent5052545658606264660612182430Contract monthBrentWTI-10-8-6-4-202468Jan-14Jan-15Jan-16Jan-17Jan-18Jan-19BrentWTI-14-12-10-8-6-4-202Jun-14Jun-15Jun-16Jun-17Jun-18-45-40-35-30-25-20-15-10-50510Jul-17Jan-18Jul-18Jan-19W CanadianPermian MidlandWTI Houston Multi-Asset Global 24 June 2019 6 Supply/demand:global balances are still fairly tight We have updated our global supply/demand model for numerous recent developments.A summary of our forecasts is shown opposite.We have lowered our demand forecasts slightly(-0.1mbd for 2019e-20e)to reflect weaker 1h19 demand,especially in the OECD.Market demand estimates have fallen recently,but our forecast for 2019e growth of 1.0mbd is still below the consensus of 1.2mbd growth We forecast US supply growth of 1.6mbd in 2019e,down from 2.2mbd in 2018 and our previous forecast of 1.8mbd(with a sluggish start to 2019)but still ahead of the pace of demand growth.On our estimates,roughly half this growth will come from Permian liquids We see other non-OPEC volumes rising by 0.4mbd in 2019e,with Brazil a key contributor,meaning total non-OPEC volumes look set to grow by 2.0mbd For 2020e we see US volume growth staying strong at 1.5mbd,helped by the easing of Permian pipeline constraints from 2H19 and new supply in the US Gulf Within OPEC,we assume Iranian crude supply falls to around 2.0mbd for the balance of 2019e from 3.8mbd a year ago(pre-sanctions)and 2.4mbd this May.While OPEC looks set to extend its agreement to curb supply,we expect Saudi Arabia and the UAE to increase supply in the coming months but only provided the market shows signs of tightening.Saudi Arabian supply fell from 11mbd in November 2018 to 9.7mbd in May,and we assume an increase to 10.4mbd,with a FY19e average of 10.2mbd These forecasts point to a global inventory draw of 0.5mbd on average across 2019e.In the first quarter,inventories built(we estimate by 0.3mbd),so this implies a strong reversal of this trend in the coming months,with seasonally stronger global demand offsetting growth in US supply as we move through the year,especially in 2Q/3Q(albeit only reflected in the data after crude transport time-lag effects)For 2020e,our forecasts point to a call on OPEC crude(the amount needed to balance the market)falling to 30.4mbd vs 31.0mbd in 2019e.This is still slightly above recent OPEC supply levels(30.0mbd in May)and broadly in line with our expectations of OPEC 2H19e supply.However,it points to the need for continued output restraint in 2020e if the market is not to return to oversupply in the face of continued strong US supply growth.We assume for example that Saudi Arabian supply remains around 10.3mbd for the year.Global oil demand,mbd Global oil supply,mbd Source:BP,IEA,US EIA,Rystad Energy,NPD,ANP,HSBC estimates Source:BP,IEA,US EIA,Rystad Energy,NPD,ANP,HSBC estimates 46.847.347.647.647.747.649.850.951.952.954.155.296.698.299.5100.5101.8102.80.00.51.01.52.001020304050607080901001102016201720182019e 2020e 2021eOECDNon-OECDy-o-y chg(RHS)32.232.132.130.530.530.946.246.346.747.147.647.27.48.210.411.913.514.796.196.899.5100.0101.9102.901020304050607080901001102016201720182019e2020e2021eOPEC crudeNon-OPECOPEC NGLUS tight oil 7 Multi-Asset Global 24 June 2019 HSBC Global oil supply/demand balance,mbd 2016 2017 2018 2019e 2020e 2021e 18-21e 4y cagr Demand USA 19.7 20.0 20.5 20.6 20.7 20.7 0.3 Europe 14.0 14.3 14.2 14.2 14.2 14.2 0.0 Other OECD 13.1 13.1 12.9 12.8 12.7 12.7-0.2 Total OECD 46.8 47.3