Oil prices directly benefit transportation

Exceeding the market's expectations, the National Development and Reform Commission suddenly announced on the 8th that the price adjustment for gasoline and diesel had been lowered by 300 yuan per ton from the 9th of the 9th. The price adjustment is the first time in 16 months that the NDRC has lowered its refined oil prices. According to calculations, after the price adjustment, the average price of gasoline fell by 0.22 yuan per liter, and the diesel price was lowered by 0.26 yuan per liter.

Although the price cut was not significant, it was due to the first cut in 16 months. Therefore, market participants believe that it is important to strengthen the expectation of the CPI drop. And “inflation” is a huge stone that suppressed A shares in the previous period. "Overall, the price of oil is downgraded to the stock market," said Gui Haoming, director of marketing at Shenyin Wanguo Research Institute.

According to traditional logic, the reduction in refined oil prices will reduce the production costs of most companies, thereby expanding the profitability of the company. Among them, the contribution to the profits of the "big oil major" aviation and other three major sectors is the most direct; and for the "petroleum duo" and other oil industry, the sales sector has formed a certain negative pressure.

However, the performance of the stock market after the previous drop in oil prices did not directly affect the market at that time. The last time the National Development and Reform Commission lowered the price of oil, on June 1, 2010, the Shanghai Composite Index fell slightly by 0.92%, PetroChina rose slightly by 0.09%, and Sinopec fell by 1.28%. The previous downward adjustment goes back to September 30, 2009. The Shanghai Composite Index rose slightly by 0.09% on that day, PetroChina gained 1.03%, and Sinopec gained 0.09%.

Shen Huiwan’s chief macroeconomic analyst Li Huiyong stated that if the refined oil price is lowered by 10% and reflected in the CPI, it will only decrease by approximately 0.1%. “It is expected that the impact of the oil price adjustment on the market may be the same as the previous two.” Gui Haoming said, “Because the reduction is too small, it is not sufficient to make a direct contribution to the corporate profit index.” However, as the most important areas Crude oil raw materials, the cost of which determines the final price of many commodities through the conduction effect. Li Huiyong believes that the drop in oil prices will ease the import pressure on domestic pressure, but it will also indirectly reduce the cost pressure on agricultural products; agricultural products account for the main weight of China's CPI, and the downward adjustment of oil prices can effectively control the rising trend of CPI. “The only premise is that international oil prices can be maintained for two to three months near the US$90 per barrel,” said Wang Liangliang, head of the China Eastern Airlines Futures Institute.

In the short term, due to the drop in oil prices, there are aviation, highways, and automobiles that directly benefit. But the airline has the most positive effect. Researchers analyze that fuel costs account for about 30% of total airline costs today. There is no logical relationship between the performance of the chemical industry and the drop in oil prices. Theoretically, midstream and downstream companies closely related to crude oil processing derivatives, such as plastics, rubber, chemical fiber, etc., are expected to directly benefit, but in fact, in the global economic downturn environment, the decline in international crude oil prices in the previous period actually made PTA, PVC, LLDPE and other varieties have lost their high cost support advantages, and their futures prices have all come close to a new low.

For oil giants such as PetroChina and Sinopec, an analyst pointed out that the oil price adjustment will not affect its huge profit base, because the decline in international crude oil prices is much greater than the decline in domestic refined oil prices.