SunSirs: The Demand Varies, China Gasoline has Higher Resistance to Drop Compared to Diesel
https://www.chemnet.com Feb 06,2024 SunSirs
According to the Commodity Market Analysis System of SunSirs, the domestic refined gasoline and diesel prices have recently slightly declined. As of the 5th, the domestic 92# gasoline price was 8,558.6 RMB/ton, with a weekly price decline of 0.54%; The domestic price of 0# diesel is 7,034.4 RMB/ton, with a weekly decrease of 1.72%.
Cost side: The trend of crude oil is declining, and cost support is weakening
Recently, the international oil price trend has declined. As of the 2nd, the settlement price of the main contract for WTI crude oil futures in the United States was $72.28 per barrel, and the settlement price of the main contract for Brent crude oil futures was $77.33 per barrel. The weekly record showed a significant decline, with WTI crude oil falling by 7.35% and Brent crude oil falling by 6.78%. Record the largest weekly decline since early October last year. On the one hand, due to geopolitical factors, Israel and Hamas are about to reach a ceasefire agreement and may release hostages. Although the news has not been confirmed, it has triggered short-term panic selling in the market, and the ceasefire is expected to increase crude oil supply, thereby suppressing oil prices. On the other hand, the US employment data released last Friday showed impressive performance, indicating that the US economy is still in an overheated state, and the hope of entering a rapid interest rate reduction cycle in the future is becoming slim. At the same time, it is favorable for the US dollar, and the US dollar has risen significantly against all major currencies. The strengthening of the US dollar has put pressure on the valuation of bulk commodity crude oil. The downward trend of the crude oil market and the collapse of the cost side have led to a low level of domestic refined oil prices.
Supply side: Shandong's local refining industry is experiencing a decline in production, with a slight decrease in supply
Recently, the operating rate of Shandong local refining has slightly declined. Recently, Shenchi Chemical will undergo a full plant maintenance, and sales during the Spring Festival holiday are average. In order to control inventory, the operating rate of Shandong local refining has slightly declined, dropping to around 61%; There has been little change in the operation of domestic main refineries, and there is currently no maintenance plan for February. The load of main refineries still has a slight increase. The reduction in the supply of refined oil has a certain supportive effect on the price of refined oil products.
Demand side: Demand driven gasoline has higher resistance to price drop than diesel
In terms of gasoline, during the Spring Festival, the increase in homecoming has driven strong demand, and gasoline consumption has significantly increased. Intermediary stocking is in the final stage, and the gasoline market has strong resistance to decline. In terms of diesel, some regions in China have experienced rainy and snowy weather, and construction projects, logistics and transportation have been suspended one after another. Diesel demand has dropped to freezing point. In addition, the current market lacks favorable guidance, and downstream demand prospects are weak, resulting in a significant drop in diesel market prices.
Market forecast: Currently, the trading logic in the market is still focused on the game between supply shortages caused by the Middle East and weak demand expectations caused by global economic slowdown. In the short term, the market's long short tug of war will become increasingly fierce, so oil prices will intensify volatility. In terms of domestic demand, intermediary procurement is coming to an end. Although gasoline demand is strong, it is difficult to have significant transaction support. Diesel demand has not improved, and there is a lack of substantial positive demand. In the short term, it is difficult for gasoline and diesel prices to rise. There is still room for diesel to fall, and gasoline is mainly volatile.