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SunSirs: Positive Factors support the Rise of China Refined Oil Market

January 29 2023 09:52:36     SunSirs (Selena)

During the Spring Festival, the price of gasoline and diesel rose. As of January 28, the domestic price of 92# gasoline was 9,005 RMB/ton, 2.08% higher than that of January 19; The price of domestic 0# diesel was 7,566.4 RMB/ton, 1.89% higher than the price on January 19. The Spring Festival holiday boosted the market of refined oil.

Cost side: after the Spring Festival, the international crude oil price rose. As of January 27, the settlement price of the main contract of WTI crude oil futures in the United States was $79.68/barrel, and the settlement price of the main contract of Brent crude oil futures was $86.40/barrel. On the one hand, the number of oil and natural gas rigs of American energy companies decreased by 8 in July, the largest monthly decline since July 2020, and also the first two consecutive months since July 2020. US crude oil supply has declined, supporting international oil prices. On the other hand, the economic recovery in the Asian region, China's crude oil import volume increased significantly, and the positive demand recovery supported the rise of international oil prices. However, the inflation level of western developed economies is high, and it is difficult to tighten monetary policy or withdraw in the short term, which will harm the global economy and undermine the international crude oil price. In general, the price trend of crude oil market is rising, and the cost side is good for the domestic refined oil market.

Supply side: The operating rate of Shandong Refinery has not changed much recently, the supply side has maintained, and the supply of main refinery resources is normal, but the pressure of main refinery shipments has decreased recently, dealers and terminal stock have increased, and the price of gasoline has risen. Recently, the average operating load of atmospheric and vacuum distillation units in Shandong's main refineries has maintained about 70%, and the manufacturers have no inventory backlog. Therefore, the supply of refined oil resources is normal, the operators' intention to enter the market has increased, the market buying and selling atmosphere is hot, and the market prices of gasoline and diesel have risen.

Demand side: With the end of the Spring Festival holiday and the peak of residents' return journey, domestic gasoline demand is still guaranteed, and the price of gasoline is rising. In terms of diesel, the demand for diesel has not changed much. The construction of outdoor industries and mines, infrastructure and other industries has maintained a low level. After the Spring Festival, the activity of the logistics industry has increased, the intention of downstream dealers to replenish the stock has increased, and the downstream demand for diesel has increased slightly. However, on the whole, the construction of outdoor oil enterprises is limited, and the price of diesel has increased slightly.

SunSirs oil product analyst believes that Russia's oil supply is strong, the expectation of supply tightening is weakened, and the supply and demand will seek to rebalance, but the recovery of economic demand supports the oil price, which is still supported in the short term. In terms of domestic supply, the overall operating rate of main refineries and local refineries has maintained, and the output of gasoline and diesel is relatively stable. After the end of the Spring Festival holiday, residents' travel declined, and the rising power of gasoline weakened in the later period. In terms of diesel, the operating rate of large industrial and mining infrastructure and other industries has gradually started due to the rise of gas temperature. The demand for diesel may increase, and the market price of diesel may rise in the later period.

 

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