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SunSirs: Demand Supports, Crude Oil Leads the rise of refined oil prices

February 25 2021 10:04:53     SunSirs (Selena)

Recently, the international crude oil market continues to soar, the price of domestic oil products has been adjusted for seven consecutive years, the actual demand for domestic oil products during the Spring Festival holiday is far better than expected, the demand for terminal replenishment is strong, and the price of domestic oil products is rising. According to the monitoring data of SunSirs, the price of gasoline on February 23 was 6,642 RMB/ ton, up 8.57% compared with that before the Spring Festival; the price of diesel on February 23 was 5,398 RMB/ ton, up 11.02% compared with that before the Spring Festival.

Recently, the price of international crude oil market continued to hit a high point in the year. As of press release, WTI oil price was at $62.5/ barrel. According to the monitoring of SunSirs, the prices of WTI and Brent crude oil have increased by more than 16% since February. The good news of the international crude oil market is spreading continuously, and the inventories of the United States and China are declining. In addition, OPEC+ is still strictly implementing the production reduction agreement, and the effect of national oil production control is ideal, so it is necessary to increase the supply and lower the crude oil market price. At the same time, the cold wave in the United States limited the supply of shale oil and gas fields in the United States, and accidental factors helped to increase the price of crude oil.

In terms of gasoline demand, the expectation of gasoline terminal demand was not good. However, the domestic epidemic control effect was very good, and the consumption situation in the terminal market was far better than expected. In addition, the international crude oil price rose sharply, and the "seven consecutive rises" of refined oil price adjustment was implemented. The market was bullish, and the demand for terminal replenishment increased. In terms of diesel oil, after the Spring Festival, various places started construction one after another, and the demand for diesel oil in engineering, infrastructure, transportation and other industries continued to rise. Coupled with the recent sharp rise in crude oil prices, the demand for replenishment and hoarding of terminal units increased, and the market demand improved. The sharp rise in international crude oil prices and the increase in terminal demand jointly pushed up domestic oil product prices.

Before the Spring Festival, Shandong local refining enterprises began to reduce their production load. As of February 22, the average starting load of daily pressure relief devices decreased from 73% before the festival to about 70%. The starting load of refineries declined, and the supply of domestic refined oil market decreased slightly, which played a role in boosting the price of refined oil.

SunSirs refined oil analyst believes that after the sharp rise of international crude oil prices, or maintain a high operating state, the bullish enthusiasm of domestic refined oil market may decline. At the same time, the operating rate of refineries will gradually pick up after the festival, and the tense situation of market supply and demand will be eased. It is expected that the rising trend of refined oil prices will slow down in the near future in China.


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