China Refined Oil Prices to Climb

According to the latest IEA monthly report, the global demand for crude oil will increase, lifting the international crude oil prices. According to SCI’s calculation, the retail prices of gasoline and diesel will increase by RMB 110/mt.

Up to March 27, China’s gasoline and diesel prices fluctuated within a narrow range. Some state-owned refineries took overhauls, and independent refineries maintained low operating rates. Therefore, the supply of refined oil declined to some extent. In terms of the diesel market, influenced by the relatively sluggish downstream demand, the increment in the diesel prices was limited. As for the gasoline market, the demand for gasoline remained mediocre due to the off-season of consumption. Therefore, the gasoline prices remained relatively stable. Moreover, as downstream users stocked up in the early stage, most downstream users consumed the inventory and held wait-and-see sentiment towards the gasoline market. Thus, the overall trading atmosphere remained stagnant.

Later, the domestic refineries will take overhauls in succession, so the refined oil output in April will continue to decline. Moreover, with the temperature getting higher, the operating rates at outdoor engineering and infrastructure industries will increase. Thus, the demand for diesel will recover quickly. In terms of the gasoline market, with the approach of the Tomb-Sweeping Day holiday, most market participants will stock up, lifting the gasoline prices. On the whole, SCI predicts that China’s refined oil prices will grow to some extent.