SunSirs: Energy, The Market Price of Refined Oil Fell sharply in March

According to the price monitoring of SunSirs, the market price of refined oil fell sharply in March. The gasoline price at the end of the month was 4,975 RMB/ ton, down 19.16% from 6,154 RMB/ ton at the beginning of the month; the diesel price at the end of the month was 6,059 RMB/ ton, down 15.47% from 5,119 RMB/ ton at the beginning of the month.

Analysis of Influencing Factors

Products: in March, Saudi Arabia and Russia announced production increase, and COVID-19 overseas spread. The international oil price fell sharply, and the market demand for refined oil was not strong. The market price of refined oil followed the crude oil price all the way down.

Industry chain: the OPEC+ conference collapsed, Saudi Arabia and Russia successively announced the news of continuous release of a substantial increase in production. At the same time, due to the impact of the overseas epidemic, more and more countries have taken measures to restrict travel, forcing more refineries to gradually reduce production. Goldman Sachs predicted that the global demand for crude oil in March will fall by 10.5 million barrels/ day, and may fall by 18.7 million barrels/ day in April. It is still possible that the relevant agencies will continue to reduce their crude oil demand expectations. The international crude oil market fell sharply to $20/ barrel, WTI crude oil fell by 54% and Brent crude oil by 45%.

Market: at 24:00 on March 17, the price of domestic gasoline and diesel decreased by 1,015 RMB/ ton and 975 RMB/ ton respectively, the biggest drop in ten years, and reached the bottom price of oil product price adjustment. Although the maximum retail price of refined oil will not be adjusted any more, it is predicted that the reduction rate will reach 1,200 RMB/ ton at 24:00 on March 31. The refining cost will be reduced. The refined oil market has room for reduction. The market has a strong wait-and-see mood and fewer transactions. With the resumption of construction and production of the enterprise, the refinery was shut down and started in succession in the early stage. The average starting load of the unit was 61.84%, 9.15 percentage points higher than that of the previous period, and the supply of gasoline and diesel increased. In March, the market price of domestic refined oil continued to decrease.

Market Forecast

The analyst of refined oil products of SunSirs believes that: the overseas COVID-19 epidemic situation is on the rise, and there is no sign of production reduction in Saudi Arabia and Russia. The international crude oil market is under pressure. At the same time, the domestic refineries are back to work, the supply of refined oil is increasing, and the market price of refined oil is under the double pressure of cost and supply. It is expected that the price of short-term refined oil will run at a low level.

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