SunSirs: China Refined Oil Supply is Sufficient, Market Price is under Pressure

The operating rate of refineries remained at a high level, the supply of refined oil was sufficient, the demand of the terminal market was not boosted enough, and the price of domestic gasoline and diesel fell. According to the monitoring data of SunSirs, the domestic gasoline price last week (the week of June 19) was 4,955.17 RMB/ ton, 1.24% lower than that of the previous week. The domestic diesel price was 4,895 RMB/ ton 0.84% lower than that of the previous week.

According to data, China imported 47.97 million tons of crude oil in May, up 19.2% year on year. A large number of crude oil is imported, and domestic refineries are also operating at full capacity. The data shows that in the first ten days of June, the operating rate of main refineries rose to about 71%, and that of Shandong local refineries rose to 76%. The domestic supply of gasoline and diesel is sufficient. In April, the apparent consumption of refined oil was 27.64 million tons, up 2.1% year on year, of which gasoline was up 4.53% year on year and diesel was up 13.4% year on year.

The demand is not good enough. In terms of gasoline, the high temperature in summer, the downstream consumption in most areas of the North continues to be good, and the demand in some areas of the south is reduced due to rainfall. In terms of diesel, traditional industries such as engineering, infrastructure, mining and so on still support the market, but the downstream stock demand is relatively low.

Last week, the overall international crude oil price rebounded after the fall, but in the near future, the international crude oil market is not good enough, and the international oil price cannot break the floor price of $40/ barrel of refined oil price adjustment, which has limited support to the domestic refined oil market price.

According to the oil product analysts of SunSirs, the current production reduction agreement continues to underpin the oil price, but there is still the possibility of a second outbreak of COVID-19 epidemic. In addition, the domestic oil product supply is sufficient, and it is expected that the domestic oil product price will continue to be slightly reduced by about 100 RMB/ ton this week.

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