SunSirs: Weak Demand, China Refined Oil Market Fluctuated at a Low Level in the First Half of August

https://www.chemnet.com   Aug 19,2024 SunSirs

According to the Commodity Market Analysis System of SunSirs, the price trend of domestically refined gasoline and diesel is sluggish. As of the 16th, the price of 92# gasoline in China was 8,542.6 RMB/ton, a decrease of 0.79% in the first half of the month; The domestic price of 0# diesel is 7,095.4 RMB/ton, with a price decline of 0.88% in the first half of the month.

Cost side: Crude oil fluctuates within a certain range, and there is little change in cost

As of the 15th, the settlement price of the main contract for WTI crude oil futures in the United States was $78.16 per barrel, and the settlement price of the main contract for Brent crude oil futures was $81.04 per barrel. In the first half of the month, the crude oil market trend first fell and then rose. In early August, due to OPEC+'s 2.2 million barrels per day production reduction, it will be implemented until the end of September, but from October onwards, depending on market conditions, it may gradually increase production, which is bearish for the crude oil market. In addition, the poor non farm payroll data and rising unemployment rate released by the United States in July, coupled with poor global economic data, have intensified market concerns about the demand outlook and increased negative pressure on the psychological level, leading to a decline in the crude oil market trend. Starting from mid August, the crude oil market saw a significant increase due to the significant decrease in US crude oil inventories and the easing of geopolitical conflicts. Overall, the crude oil market fluctuated within a range, while the domestic refined oil market remained sluggish.

Supply side: Refinery starts production, increases supply side

Recently, some maintenance facilities in Shandong have been restarted, and the operating rate of local refineries in Shandong has slightly increased. The average operating rate of local refineries in Shandong is around 55%, while the national operating rate is 62.84%. The operating rate of local refineries has increased compared to before, and the supply of refined oil has increased. The trend of local refinery gasoline and diesel market has declined.

Demand side: Gasoline demand is generally low, while diesel demand is sluggish

In terms of gasoline, with the gradual opening of summer tourism and the maintenance of high temperatures, the use of car air conditioning has increased, and the demand for gasoline is still acceptable. Intermediaries replenish their inventory according to demand, and the purchasing sentiment is average. However, the demand for gasoline has been somewhat impacted by new energy vehicles, and the gasoline market has slightly declined. In terms of diesel, on the one hand, the high temperature and heavy rain have affected the start of outdoor projects, and there has been no improvement; Agricultural diesel has come to an end, and coupled with the impact of fishing bans in some northern waters, the consumption of diesel market resources is slow. Traders and end enterprises are cautious in their procurement operations, resulting in a slight accumulation of inventory in the diesel market and a sluggish diesel price market.

Currently, geopolitical instability continues to affect the market. The traditional peak season in the United States is coming to an end, and coupled with poor economic data performance, fundamental concerns may cause short-term fluctuations in crude oil. From a domestic perspective, the short-term refinery operating rate has slightly increased, the number of summer travelers has increased, the use of air conditioning in summer has increased, the demand for gasoline is still guaranteed, and the price trend of the gasoline market is fluctuating; In terms of diesel demand, the end of fishing bans in some sea areas has boosted diesel prices. In addition, with the gradual reduction of high temperatures in the later period and the gradual increase in outdoor operations, diesel prices have shown a rebound trend in the later period.

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