SunSirs: This Round of China Domestic Refined Oil Retail Prices may Experience a "Four Consecutive Declines"

The current round of domestic refined oil price adjustment window opened at 24:00 on November 21, and the retail price of refined oil may be lowered according to the mechanism. The 2023 retail price adjustment has gone through a "ten up, nine down, and three stranded" period, with a significant decline in the crude oil market during the cycle and a widening negative rate of change. The zero selling price of domestic refined oil may face a "tenth decline".

Entering this pricing cycle, the international oil price trend has significantly declined. As of the 20th, the settlement price of the main contract for WTI crude oil futures in the United States was $77.60/barrel, while the settlement price of the main contract for Brent crude oil futures was $82.32/barrel. Firstly, the economic data is poor, and the news is bearish for the oil price market. The inflation level in the United States remains a concern, with the Federal Reserve indicating that interest rates may still be raised in the future, and the US dollar rising, putting pressure on the prices of commodities such as crude oil and gold denominated in US dollars; The multiple economic data released by the United States have made the market bearish about the future demand outlook, leading to a decrease in crude oil prices. Secondly, the supply tension caused by the situation in the Middle East has eased, as the seasonal decline in internal demand in the Middle East region has led to an increase in its export share; The peak oil season in North America and Europe has ended, and demand has declined, suppressing the crude oil market. Thirdly, the increase in US crude oil inventory exceeded expectations, coupled with concerns about demand in the Asian region and bearish factors, leading to a decline in international oil prices during the current cycle. As of the 21st, the change rate of crude oil varieties was -8.68% on the 10th working day. It is expected that gasoline will be reduced by 340 RMB per ton, diesel will be reduced by 330 RMB per ton, with an increase in prices of 92# 0.27 RMB, 95# 0.28 RMB, and 0# 0.28 RMB. This round of retail prices of refined oil products will be lowered for the tenth time this year.

In terms of gasoline: 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 rate of refineries in Shandong is around 64.5%, and there has been little change in the supply of refined oil. The support for crude oil costs is insufficient, and in the short term, there is no support for holidays. Travel demand has returned to normal, and air conditioning oil support has been lost. Gasoline demand has decreased, and some businesses are moderately restocking on dips. Purchasing sentiment is not positive, Gasoline prices fluctuate at low levels.

In terms of diesel: The supply of diesel fuel is still relatively loose, and due to the impact of the decline in crude oil, the diesel market price is sluggish. With the impact of low temperature, rain, and snow weather, the demand for diesel fuel in the infrastructure industry is gradually weakening, and outdoor infrastructure, engineering, and other construction projects have declined. However, there is an increase in livestock and poultry exports, and there is still support for fishing production demand. Long short game, and the diesel market price is mainly volatile.

In the future, the logic of crude oil trading in the short term is still a supply-demand game, and the pressure of tight supply has eased as the geopolitical situation in the Middle East has not shown an expanding and deteriorating trend. Market attention is more focused on various economic data indicators, which will become a barometer of demand prospects. Overall, crude oil price ranges are mainly volatile. In terms of domestic supply, the operating rate of local refineries has not changed much, and the supply side is still relatively loose. The support for gasoline demand is limited, and gasoline prices are mainly fluctuating and falling in the short term; The demand for diesel is lower than expected, coupled with insufficient cost support, and it is expected that the diesel market will be mainly weak and volatile.

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