SunSirs: The Cost Impact is Significant, China Gasoline and Diesel Market Weakened

According to the Commodity Market Analysis System of SunSirs, the prices of refined gasoline and diesel in China have weakened and decreased significantly, with gasoline prices showing a significant decline. As of the October 18th, the price of 92# gasoline in China was 8,565.4 RMB/ton, a 5.76% decrease from October 6th price; The domestic price of 0# diesel is 7,817 RMB/ton, a decrease of 3.17% compared to the price on October 6th.

Cost side: geopolitical tensions, wide fluctuations in crude oil

During the Double Festivals period in China, crude oil prices significantly decreased, and oil prices rebounded after the festival. The crude oil market fluctuated significantly. As of the 17th, the settlement price of the main contract for WTI crude oil futures in the United States was 86.66 US dollars per barrel, and the settlement price of the main contract for Brent crude oil futures was 89.90 US dollars per barrel. Recently, the geopolitical situation in the Middle East has become the main factor affecting the crude oil market, which is currently limited to two countries and has not spread to neighboring countries, Concerns about the tight supply of crude oil in the Middle East region support international oil prices, which tend to be stronger in the short term. However, macroeconomic pressures and the Federal Reserve's interest rate hike have not yet been determined. The peak oil season in North America is gradually coming to an end, and the bearish demand has correspondingly suppressed the crude oil market. Overall, the crude oil market trend in October has declined, which has affected the trend of domestic refined oil prices.

Supply side: High operating rate, relatively loose supply side

Recently, the operating load of refineries in China has exceeded 70%, and the utilization rate of atmospheric and vacuum capacity in refineries in China has remained at a high level. The operating load of refineries in Shandong is around 65%, and the supply of refined oil products in Shandong is relatively loose; The main domestic refineries maintain high load operation and loose supply, which to some extent undermines the domestic refined oil market prices.

Demand side: gasoline demand declining, diesel demand still acceptable

In terms of gasoline, there has been no holiday support recently, with a decrease in self driving frequency and driving radius. The demand for gasoline has decreased, and some businesses are moderately restocking on dips. The purchasing sentiment is not positive, and some refineries have increased their inventory. The decline in gasoline is significant. In terms of diesel, the construction of outdoor infrastructure and engineering projects has maintained a high level, coupled with the support of demand for open sea fishing and agricultural autumn harvests, logistics and transportation have shown active negative performance. The overall demand for diesel is relatively stable, so the decline in diesel is relatively small.

Future forecast: In the short term, due to geopolitical issues, crude oil prices may show an upward trend, and the cost side will support the domestic refined oil market. Lack of demand support for gasoline makes it difficult for the gasoline market to recover, or there is still room for a slight decline; There is still demand support for diesel, and with positive cost news, it is expected that the diesel market may have a recovery trend.

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