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SunSirs: The Decline of Crude Oil Price Drives the Price of China Gasoline and Diesel to Rise and Fall

June 15 2020 10:38:54     SunSirs (Selena)

At the beginning of last week, the price of refined oil was driven up by the good result of OPEC+ agreement. At the end of last week, the oil market was worried that the demand of crude oil market and the record high inventory in the United States were negative, and the domestic gasoline and diesel prices fell back. According to the monitoring data of SunSirs, the domestic gasoline price last week (the week of June 12) was 5,017.5 RMB/ ton, which was 0.16% lower than that of the previous week. The domestic diesel price was 4,967.17 RMB/ ton, 0.61% lower than that of the previous week's.

On June 7, at the OPEC+ ministerial video conference, OPEC agreed to extend the 9.7 million barrel/ day reduction by one month until the end of July. WTI crude oil and Brent crude oil prices in the United States topped $40/ barrel and $43/ barrel respectively. In the middle of the week, there was a great deal of worry about the second attack on crude oil. At the same time, as of the week of June 5, the crude oil inventory in the United States unexpectedly increased by 5.7 million barrels to a record high of 538 million barrels, and the international oil price dropped. As of 15:00 June 12, the price of WTI crude oil futures market in the United States was around $35/ barrel, a weekly drop of 10%.

In terms of gasoline, the consumption of gasoline is strong in summer, and there is a certain demand for replenishment at the end of storage, but the international oil price surges and falls, and the purchase willingness of the middle and lower reaches weakens. In terms of diesel, the wheat harvest in the north China is coming to an end, the rainfall in the south is more, the benefits at the demand end are still relatively limited, and the operation of stock up is reduced.

At present, the demand for refined oil is not good, the refinery inventory is increased, and the unit operation rate is reduced. As of June 10, the average operating load of the primary atmospheric and vacuum unit in Shandong Dilian was 75.29%, down 1.13% compared with the previous week.

In the short term, the demand of oil market is still subject to the epidemic situation of COVID-19. The implementation of production reduction in some OPEC countries, such as Iraq and Nigeria, remains to be discussed. The international oil price is under downward pressure. The demand for domestic oil products is weakening, and the inventory of refineries is increasing. It is expected that the price of domestic oil products will be reduced by 50-150RMB/ ton this week.


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