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China: Gasoil wholesale prices climb over rising international crude, tight supply

https://www.chemnet.com   Aug 05,2010
Domestic gasoil wholesale prices have been rising this week due to continuous rises in international crude prices, also thanks to tight supply and slightly stronger demand.


As Brent crude gained from US$78.68/bbl on Jul 30 to US$83.84/bbl on Aug 3, the average gasoil wholesale price climbed from Yuan 6,693/mt to Yuan 6,769/mt, up 1.14%, C1's data shows. Gasoil prices rose across the country.
Gasoil prices have also been bolstered up by tightening supply amid maintenance and impacted delivery. PetroChina started turnaround in Daqing refinery and Jinxi Petrochemical in August, and it has also shut down a 5-mil-mt/yr CDU in Lanzhou Petrochemical for maintenance. Sinopec plans to conduct large quantity of maintenance in North China-based refineries in August-September, and CNOOC Huizhou refinery has cut supply due to maintenance of secondary units this month. Meanwhile, gasoil delivery by ship has been impeded by floods in some areas.


In addition, gasoil demand has also gained modestly, thanks to flood resistance in some areas and the restoration of fishing in South China Sea.
In view of these factors and very low stockpiles held by independent traders, state-owned oil majors pushed up gasoil wholesale prices continuously in early August.


Gasoil wholesale prices may go up further amid brisk sales and tight supply this month, also with support from higher internal settlement prices between PetroChina's regional marketing companies and provincial ones.
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