A、 International crude oil market is complex and changeable, which makes enterprises need to avoid risks strongly
As a leading commodity, crude oil has its own commodity attributes and strong financial attributes. Changes in international political and economic situation and geographical situation will cause sharp fluctuations in crude oil prices. Historically, crude oil prices have fallen to less than $10 per barrel at the lowest level, while they have risen to $147 per barrel at the highest, with a huge amplitude. Especially in the past 20 years, due to the unstable global political and economic situation, frequent geopolitical conflicts and the unstable crude oil production of oil producing countries, the shale oil revolution in North America has also changed the supply pattern of the global crude oil market, and oil producing countries have to change their supply strategies frequently to cope with the changes in the supply of oil market and stabilize the oil price, but even so, in the face of major macro and political events，Crude oil is still the most volatile.
The novel coronavirus pneumonia has been continuously fermented worldwide since February of this year. The global stock market, bond market and commodity prices represented by crude oil have been falling continuously. Under this background, the conference of the Alliance for production reduction, which was highly regarded by the market, unexpectedly "collapsed", and the "reduction" conference finally turned into an "increase production" conference. Saudi Arabia and Russia and other oil producing countries expressed substantial increase in production. At that time, Saudi Arabia took the lead in lowering the official price of crude oil sold to Europe, Asia, the United States and other places in order to provoke a "price war". As a member of OPEC, Iraq, Iran and other countries also followed in lowering the official price of crude oil in some regions to seize market share, which also became the fuse of the aggravation of oil price decline since March. Against the background of the rising market risk aversion, the decline of crude oil demand and the sharp increase of supply expectation brought by the epidemic, crude oil prices have almost "cut back" since the beginning of the year, crude oil prices in Europe and the United States have been approaching the historical low point in February 2016, while domestic crude oil futures prices have continued to refresh the lowest point since listing.
In the face of such a complex and volatile international oil market and volatile crude oil prices, the operation of oil companies is becoming more and more difficult, and the uncertainty is greatly increased. When the price of crude oil falls sharply, the upstream mining enterprises face the operating losses caused by the price of crude oil falling below the cost line. When the price of crude oil rises sharply, the refineries and downstream chemical enterprises in the middle reaches face the risk of increasing the cost of raw materials. As the direct demander of oil products, airlines and logistics enterprises also face the increase of operating costs. Therefore, for the relevant oil companies, they are always faced with the business risks brought by the oil price fluctuations, and they have a very strong demand for hedging.
B. The listing of Shanghai crude oil futures provides oil companies with hedging tools
Before 2018, only WTI crude oil futures listed in NYMEX and Brent crude oil futures listed in IPE in the international crude oil market were in mature operation, and they played the role of crude oil spot trade pricing benchmark in North America and Europe, while crude oil futures were listed in Asia, such as Dubai exchange, Singapore Exchange and India exchange, However, trading is not active and has not become the pricing benchmark in Asia, that is to say, the pricing benchmark of spot crude oil trade and the hedging instrument of crude oil futures in Asia have been missing. For domestic oil companies, such as CNPC, SINOPEC, CNOOC, the central enterprise has the strength to conduct relevant hedging transactions in the European and American crude oil market, but for most domestic refineries, small and medium-sized oil trading enterprises and chemical enterprises, it is difficult to find channels for hedging.
On March 26, 2018, after years of research and breakthroughs, Shanghai crude oil futures was officially listed for trading. It is the first domestic futures variety that allows foreign traders to participate in. The trading oil is medium-quality sulfur-containing crude oil, which is the main oil imported by domestic crude oil. It has a broad spot basis and uses bonded delivery is adopted to avoid the restriction of import qualification of enterprises and facilitate foreign participants to participate in the delivery of Shanghai crude oil futures.
After the listing of Shanghai crude oil futures, the overall operation was stable, and the trading volume and position continued to enlarge. By the middle of March this year, the highest position had exceeded 100000 lots, the highest daily trading volume had exceeded 700000 lots, and the average daily trading volume remained around 260000 lots. From the perspective of historical trend, Shanghai crude oil futures price has a good linkage with domestic related energy products and overseas crude oil futures.
At the beginning of 2020, the exchange launched another simulation trading of crude oil futures TAS instruction. The TAS instruction can be traded at the settlement price or the price near the settlement price within the specified trading period. For the entity enterprises, the settlement price of futures contract is mostly used as the pricing benchmark when conducting spot trade point price, and if there is no such tool when conducting futures risk hedging. Generally, the settlement price of the day is simulated by placing orders several times in the market, which to a certain extent increases the transaction risk, and the TAS instruction provides enterprises with a convenient and efficient risk management tool, which will promote the play of market functions after being officially launched.
The listing of Shanghai crude oil futures not only enriches the varieties of futures in the domestic market, but also provides hedging tools for domestic and overseas related enterprises. Especially for some small and medium-sized domestic oil enterprises, they used to passively accept the business risks brought by the change of crude oil price, but now they can use the domestic listed crude oil futures for corresponding risk management, which meets the needs of hedging. In addition, the listing of Shanghai crude oil futures also makes it possible to arbitrage the varieties of crude oil industry chain and cross market arbitrage. After the listing of Shanghai crude oil futures, it has formed a good linkage with the previously listed varieties of asphalt futures, fuel oil futures and overseas crude oil futures, providing relevant enterprises with the opportunity of cross market arbitrage and cross market arbitrage.
In addition, there are already spot crude oil trade among enterprises with Shanghai crude oil futures as the Pricing Reference benchmark, which is also an important step for China to compete for the right of pricing in Asia.
It can be said that the listing of Shanghai crude oil futures not only complements the crude oil hedging tools in Asia, but also meets the needs of enterprise maintenance, industry chain variety arbitrage and cross market arbitrage. More importantly, with the gradual stability and maturity of operation, it will gradually become the crude oil pricing benchmark in Asia, providing pricing reference for more spot trade.
C. Shanghai crude oil futures helps enterprises deal with oil market fluctuations smoothly
The crude oil industry chain is relatively long, and there are many enterprises in each link of the industry chain, especially the small and medium-sized enterprises have weak anti-risk ability. Without corresponding risk management, it is difficult to survive in the market for a long time.
In the fourth quarter of 2019, due to the favorable trade situation between China and the United States, the continuous deepening of production reduction in oil producing countries and the unstable situation in the Middle East, the crude oil price continued to rise, and the domestic crude oil futures price rose by 100 yuan / barrel in three months, while the continuous rise of crude oil price brought greater risks to the price points of relevant oil import enterprises.
A light circulating oil enterprise in South China has been importing light circulating oil from abroad for a long time. Its pricing is based on Singapore's price of Proctor diesel oil. The rise of crude oil price in the fourth quarter of 2019 also drives the price of Singapore Platts diesel oil to follow the sharp rise. This light circulating oil import trader faces the risk of increasing the price and increasing the import cost to a certain extent. After learning the knowledge of Shanghai crude oil futures and the content of hedging operation in detail, this company decided to use Shanghai crude oil futures for hedging
The price of Singapore Platts diesel oil has a strong correlation with the trend of Shanghai crude oil futures price, reaching about 0.9, so it is feasible to use Shanghai crude oil futures to replace hedging. Through the research and analysis of crude oil futures market, the enterprises enter into the market at a relatively low price to purchase and hedge, and close their positions in the futures market after the spot market price points. By doing so, the light cycle oil company locked in import costs and made operating profits by selling to downstream markets.
For small and medium-sized enterprises, when the oil price fluctuates violently, if there is no corresponding risk management operation, the risk exposure faced by enterprises is very huge. In recent years, some large refineries in Shandong Province have broken their capital chain and gone bankrupt. Under the background of the continuous downturn of domestic refined oil market, the operating profit of local refineries has been greatly squeezed. If crude oil futures can be used for corresponding risk management, the operating pressure of enterprises will be relieved to a large extent, and the anti-risk ability and competitive advantage of enterprises will be improved.
With the continuous maturity of Shanghai crude oil futures operation and the effective exertion of hedging function, more and more petroleum enterprises are participating in domestic crude oil futures trading to avoid the risk of oil price fluctuation through hedging operation. At the same time, most enterprises also taste the " Benefit ". No matter how the spot market fluctuates, futures instruments can offset this risk, especially in this "extreme" market since this year, the demand for crude oil is weak and the oil price basically falls below the domestic crude oil production cost line. There is no time for the recovery of demand under the epidemic situation. At this time, enterprises are "helpless" in the spot market. Risk hedging through crude oil futures tools can make up for the losses of spot operation and ensure the stable operation of enterprises. It can be said that Shanghai crude oil futures not only provides oil companies with hedging tools, if enterprises can use this tool well, it will be the "stabilizer" and "talisman" of enterprise management.