SunSirs: The Decline in Crude Oil Prices Led to a Decrease in China Refined Gasoline and Diesel Prices

According to the Commodity Market Analysis System of SunSirs, the price of locally refined gasoline and diesel in Shandong Province mainly decreased in early August. As of the end of the month, the price of 92# gasoline within 8 countries was 7,856.17 RMB/ton, a decrease of 1.05% in early August; The domestic price of 0# diesel is 6,668.33 RMB/ton, with a price trend decline of 1.59%.

Cost aspect: The decline in crude oil prices has led to a decrease in refined oil products

The main reason for the decline in crude oil market prices is that as of the 7th, the settlement price of the August WTI crude oil futures contract in the United States was $63.88 per barrel, and the settlement price of the August Brent crude oil futures contract was $66.43 per barrel. The negative factors in the crude oil market, on the one hand, OPEC+announced a cumulative production increase of 2.3 million barrels per day by September, marking the organization's exit from the plan to reduce production by over 2.2 million barrels per day one year ahead of schedule, which is bearish for the oil market. On the other hand, the geopolitical situation in the Middle East is affecting the oil market, and global macro data is bearish. Coupled with the fundamental impact of the upcoming off-season for US summer demand, crude oil market prices will continue to be under pressure. The crude oil market directly affects the domestic refined oil market, and the trend of domestic gasoline and diesel prices is declining.

Supply side: Shandong's local refining operation is normal, and there is little change in refined oil products

Recently, there has been little change in the operating rate of local refineries. The average operating rate of Shandong's local refineries is around 52%, and the operating rate of the country's main refineries has risen to around 84%. The supply of refined oil products from local refineries has slightly increased, but the operating rate of Shandong's local refineries has remained at a medium low level, providing some support for the refined oil market. The supply of gasoline and diesel in Shandong has not changed much.

Demand side: The overall market for gasoline and diesel is declining, with a focus on essential needs

In terms of gasoline, recent activities such as residents' travel have been normal, and coupled with the recent fluctuations in the crude oil market, the wait-and-see atmosphere in the domestic gasoline market has intensified, resulting in further setbacks in transactions. In addition, the increasing popularity of new energy vehicles has led to lower than expected demand performance, resulting in a volatile and downward trend in the gasoline market. In terms of diesel, there has been an increase in rainy weather recently, which has weakened terminal demand. With the end of summer harvest, agricultural oil consumption has decreased compared to before. In addition, diesel inventory in July was 1.1477 million tons, a month on month increase of 11.37%. Infrastructure and logistics are relatively normal, and the diesel market trend has declined.

Negative factors will dominate in the near future, and the peak season for traditional fuel consumption in the United States is coming to an end. Supply side risks have not been eliminated, and international oil prices are mainly weak in the short term, which will weaken the cost support for the domestic refined oil market. From a domestic perspective, the operating rate of refineries has increased in the short term, and the supply of refined oil products is loose. In addition, there has been no significant increase in gasoline demand, and the gasoline market prices have mainly fluctuated and fallen; The demand for diesel has declined compared to before, and diesel prices may continue to decline in the later period.

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