SunSirs: Rising Crude Oil Futures Boost Refined Oil Market

On December 19th, international crude oil futures closed higher. The settlement price of the February WTI crude oil futures contract in the United States was $56.52 per barrel, an increase of $0.52 or 0.9%. The settlement price of Brent crude oil futures for February was $60.47 per barrel, an increase of $0.65 or 1.1%.

The rise in international crude oil futures prices has increased the production cost of diesel, and as a direct downstream product of crude oil, it is expected that spot prices will follow suit. The rising cost of crude oil has put pressure on refineries to raise prices, which is favorable for the performance of the diesel spot market.

The rise in crude oil prices indirectly affects the production cost of PVC. PVC raw materials such as ethylene originate from petrochemicals, and the cost increase supports spot prices. However, the supply and demand factors of PVC have a significant impact, and the degree of benefit is limited.

As gasoline is the main refined product of crude oil, the rise in crude oil futures directly increases its production costs, and it is expected that spot prices will rise. Market optimism is transmitted to the gasoline demand side, boosting short-term prices.

The rise in international crude oil futures prices indicates a tightening of supply and demand or an increase in market confidence, which directly benefits the spot price of crude oil. The WTI and Brent contracts have risen by over 1%, reflecting an improvement in global demand expectations.

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