Several risk factors of oil market

　　COFCO Futures Research Center Jia Boxin

　　Recently, many varieties in the domestic futures market have gone out of a similar trend, and there are many varieties with high volatility. There is a certain deviation between the price fluctuation and the actual situation of the commodity's own fundamentals. The macro sentiment and the trend of crude oil have a more prominent impact on the commodity, while the fundamentals are more reflected in the strength of varieties. For the oil market, the power to break through the previous high is insufficient, but the support of favorable factors at home and abroad leads to the trend of oil maintaining a high shock.

　　Considering the risk factors of oil market trend, the first risk point is macro and crude oil. During the National Day holiday, the sharp rise in crude oil prices led to the oil price breaking through the early fluctuation range, while the oil itself did not show much good fundamentals. The recent decline in crude oil prices has also led to a certain weakness in the trend of oil prices. In the later stage, once there is a problem with crude oil, which leads to the cooling of capital sentiment, there may be a great callback risk for oil prices with strong financial attributes, and the trend of domestic palm oil is also facing a change in the strength relationship with soybean oil.

　　The second risk point is the production of palm oil in the producing area. Since the fourth quarter, a major positive factor supporting the rise in oil prices has been the shortage of labor in Malaysia. Most of the workers in Malaysia's palm plantations come from neighboring countries, such as Indonesia and Thailand. The restrictions caused by the epidemic led to a small labor force in Malaysia in the second half of this year. The supply is low. From August to October, the output of the three seasonally increased months remained at the level of about 1.7 million tons, resulting in the continuous tension of the balance sheet of Malaysian palm oil. The Malaysian government announced earlier that it would introduce more than 30000 foreign workers, but the actual situation is not so optimistic, and the real implementation of the policy will take time. After entering the seasonal production reduction cycle in November, the high-frequency production data gave an estimate of a slight increase month on month. We need to note that the output of more than 1.7 million tons may be guaranteed under the condition of labor shortage, so what we need to consider in the later stage may be more the impact of seasonal production reduction, and the influence of labor force will decline.

　　The third risk point is the dumping and storage of domestic soybean oil. After entering the fourth quarter, several market rumors about soybean oil dumping and storage have led to large price fluctuations. The rapid narrowing of domestic bean brown price difference is also closely related to the expectation of soybean oil dumping and storage. If soybean oil is dumped and stored, the tense domestic supply and demand pattern will be quickly relieved, and the soybean oil inventory may quickly rise to more than 1 million tons, and the three major oil prices are facing the risk of rapid decline.

　　On the whole, there is great uncertainty in the current oil market. What is relatively certain is that the price is less likely to continue to rise and break through the previous high, the upper space is limited, and the lower support will be affected by the above risk points. If no risk event occurs, the oil price is expected to maintain the current high shock pattern. From the operational point of view, due to the lack of trend trading opportunities, it is recommended to wait and see for the time being.