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SunSirs: High Volatility in Crude Oil Market
July 23 2020 10:14:15SunSirs(Selena)

The international crude oil price soared and fell, the new round of China domestic refined oil price adjustment did reached the adjustment line of 50 RMB/ ton. There is a lack of guidance on the market price of domestic oil products, and the price of gasoline and diesel has fluctuated.

In terms of international crude oil, U.S. crude oil demand improved and crude oil inventory decreased significantly. While the crude oil market released good news, OPEC+ relaxed production reduction as scheduled, and the overseas epidemic continued to drag down the global economy and crude oil demand prospects. International oil prices rose first and then fell, while WTI crude oil prices fluctuated above $40/ barrel. High volatility of crude oil market lacks direction guidance for refined oil market.

In terms of gasoline, in hot summer, more gasoline is used for automobile air conditioning, and the terminal demand is relatively good. Traders and terminal gas stations are more active in replenishment, and the market price is supported. In terms of diesel, the southern region has continuous rainfall and increasing flood, and the outdoor operations such as mining, logistics and infrastructure are limited. The demand for diesel oil is not good, and the market price lacks support. Overall, the demand of diesel market is not as good as that of gasoline market, with gasoline price rising and diesel price falling slightly.

Recently, some refinery units have entered the maintenance period, and the start-up load of the refinery has declined slightly. The supply of refined oil resources has been slightly reduced, and the pressure on domestic oil product shipment has eased.

The oil product analyst of SunSirs believes international oil prices will continue to consolidate around $40/ barrel entering the peak gasoline demand season in hot summer, while the impact of rainfall on the diesel market in the South will gradually weaken. It is expected that the price differentiation trend of China gasoline and diesel will begin to shrink in late July.

 

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