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SunSirs: The Crude Oil Market is Declining, and Gasoline and Diesel is Sluggish in China
December 14 2023 10:24:03SunSirs(Selena)

According to the Commodity Market Analysis System of SunSirs, the recent domestic refined gasoline and diesel prices have fluctuated at a low level. As of the 13th, the price of 92# gasoline in China was 8,317.6 RMB/ton, a decrease of 1.16% since December; The domestic price of 0# diesel is 7,404.4 RMB/ton, with a decrease of 1.97% since December.

In December, international crude oil futures continued to decline. As of the 12th, the settlement price of the main WTI crude oil futures contract in the United States was $68.61 per barrel, and the settlement price of the main Brent crude oil futures contract was $73.24 per barrel. Oil prices reached a six-month low, mainly due to the unexpected increase in CPI data and the rebound in inflation, which lowered the market's expectations for the Federal Reserve's interest rate cut early next year; The crude oil market has shown a downward trend due to market concerns about oversupply. The unexpected rise in inflation data has added insult to injury to the already weak oil market, exacerbating the decline in crude oil; The results of the OPEC+ production policy meeting did not meet market expectations, as the reduction in production was less than expected; Secondly, the voluntary nature of the reduction in production is questionable, and the supply side will face greater pressure in the future. Overall, the bearish factors have led to a decline in the crude oil market and a collapse in the cost side, resulting in a sluggish domestic refined oil price trend.

Recently, the operating rate of Shandong refining has slightly increased, and the shortage of crude oil quotas for Shandong refining may be alleviated. The low supply of refined oil may come to an end. Overall, the operating rate of Shandong refining under atmospheric and vacuum conditions has slightly increased, and the supply of refined oil in Shandong refining has slightly increased; There has been little change in the operation of domestic main refineries, while the supply side remains stable. The increase in the supply of refined oil will inevitably be transmitted to the price level. With the increase in supply, price support will inevitably weaken, and the refined oil market will fluctuate and decline.

In terms of gasoline, winter car travel on the demand side is relatively stable, but in the absence of holiday support, the demand side lacks favorable support, and the gasoline market has reached a relatively low level, with a slight decline in the gasoline market. In terms of diesel, with the impact of low temperature, rain, and snow weather, the demand for diesel brought by the infrastructure industry has gradually weakened, and outdoor infrastructure, engineering, and other construction projects have declined. However, the logistics industry is relatively stable, and downstream demand prospects are weak, resulting in fluctuating prices in the diesel market.

Currently, crude oil is under dual pressure from both macro and supply and demand sides. In the short term, the market is waiting for the energy outlook reports from OPEC and the International Energy Agency (IEA) to be released next week. There will be adjusted demand in the oil market this week. Overall, the oil market may maintain a weak situation in the near future or continue to seek downward space. In terms of domestic supply, refineries in Shandong have slightly increased their production, but downstream demand is mainly in demand, lacking substantial benefits. In the short term, the price of gasoline and diesel is sluggish.

 

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