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[Everyone in the energy sector is reading this – click the upper right corner to ‘follow’.] Buying at rock bottom only leads to more uncertainty! Yes, crude oil has plummeted again. The CBRC’s Crude Oil Treasure issue remains unresolved, and the oil market is once again experiencing turmoil! Since the beginning of this year, the crude oil market has been nothing but a hellish place; those who enter it may not be able to come out alive. In the first quarter, crude oil prices plummeted sharply, even dropping to negative levels; oil traders suffered heavy losses, and the entire upstream and downstream supply chains were also greatly affected. Currently, demand has collapsed and storage capacities are at critical levels; several major American oil companies have filed for bankruptcy. With oil prices plummeting again, what will happen to the chemical industry? Crude oil prices plummet again, putting oil companies under pressure and risking bankruptcy! Due to the impact of the pandemic, demand for crude oil dropped significantly, yet its production did not decrease as expected or to the same extent. The problem of excess crude oil is becoming increasingly apparent; from the Middle East to the United States, there is virtually no place to store it. S&P analysis firm: It is estimated that the world’s remaining oil reserves amount to around 1.4 billion barrels, of which 1 billion barrels are available on land and 400 million barrels at sea. This means that the world’s oil reserves will be exhausted within 3 months! OPEC’s latest report shows that global crude oil demand is expected to decline by 6.9 million barrels per day throughout 2020, dropping to its lowest level in 30 years. Demand is far in excess of supply; oil tankers loaded with oil are floating at sea. Under pressure from various factors, crude oil prices have once again plummeted! On April 27, international oil prices tumbled sharply; U.S. crude oil futures fell below $12 per barrel, dropping by nearly 30% ； On April 28, crude oil continued to decline under pressure; the latest price for WTI crude oil was $10.55 per barrel, representing a decline of 17.42% ； Brent crude oil priced at $22.08 per barrel, a decrease of -4.27%. Crude oil prices remain falling, demand is approaching zero, and U.S. oil companies are under further pressure and filing for bankruptcy. Since April, three oil companies have filed for bankruptcy: April 1: American Whiting Petroleum filed for bankruptcy reorganization ； April 17: Singapore’s Xinglong Group and its tanker subsidiaries file for bankruptcy protection ； April 26: Offshore drilling company Diamond Offshore Drilling filed for bankruptcy. △Video from CCTV Finance’s “World Finance” program: Three major oil companies have filed for bankruptcy one after another, once again indicating that a tough period for the oil industry has arrived, and signs of bankruptcy within the oil industry chain are already evident! The sharp drop in oil prices accelerated the breakdown of companies’ cash flows ； Deteriorating demand has exacerbated the contraction in business activities, leading to an economic crisis. In the short term, oil prices will remain low. The continuous decline in international oil prices has affected the entire global oil industry chain, and a domino effect of bankruptcies among global oil companies has begun; the global oil industry is also facing significant restructuring! Early Saudi production cuts unexpectedly spur a surge in chemicals prices? As the situation deteriorates more rapidly, Saudi Arabia, Russia, and other OPEC members will join forces to cut production this Friday, reducing daily output by 9.7 million barrels, a decrease of over 20%. According to foreign media reports, Saudi Aramco will start cutting production by May 1, achieving the target of a reduction of 8.5 million barrels per day ahead of schedule. Many industry experts believe that Saudi Aramco’s early production cuts have indirectly boosted the chemicals market, leading to an increase in prices for some of the raw materials used in this sector. Fluctuations in crude oil inevitably affect the chemical industry chain. According to this week’s list of products with the highest price increases, items such as butadiene and toluene in the petrochemical industry chain have seen significant price rises. Butadiene: The international crude oil futures market closed lower again yesterday. The prices of butadiene in the Asian overseas market remained stable, while domestic butadiene prices stayed firm, supported by high supply levels from manufacturers. It is expected that butadiene prices will fluctuate within a relatively narrow range. Toluene: Crude oil prices have plummeted, leading to a weak and volatile market. Domestic demand remains decent, with downstream users mainly stockpiling goods in preparation for holidays; trading activity is sluggish, and a weak and volatile market trend is expected. With the maintenance at downstream factories completed and demand increasing, coupled with the earlier-than-expected reduction in crude oil production, this situation can indeed boost confidence in the chemical industry in the short term. However, the crude oil industry chain involves many chemical products. If crude oil prices continue to plummet, coupled with factors such as the impact of the pandemic on demand, it is likely that the chemical products within this industry chain will remain in a weak performance state this quarter, with little prospect of price increases. Although countries are competing to cut production, they are even introducing various financial support measures to boost oil prices. But with the pandemic ongoing, weak demand remains unchanged, there is a severe surplus of crude oil, and uncertainty persists in the crude oil market; sentiment is strongly bearish, so caution is needed when buying stock at low prices! Sources: Guangzhou Chemical Trading Center, Sina Finance, CCTV Finance, Oil Circle, Yicai, Business News Network, etc. Disclaimer: The above content is reprinted from WeLINK Chemical; the information presented does not represent the position of this platform. National Energy Information Platform: Phone number: 010-65367702, Email: hz@people-energy.com.cn, Address: No. 2 Jintai West Road, Chaoyang District, Beijing, People’s Daily Press. Source: National Energy Information Platform