China Refined Oil Prices Hovered at Highs

Recently, the overall international crude oil prices fluctuated upward. Therein, according to the IEA monthly report, the global demand for crude oil in 2018 will grow to some extent, lifting the international crude oil prices. Besides, the geopolitical risks gave some support to the increase in the international crude oil prices.

In recent days, the overall international crude oil prices hovered at highs, giving strong support to China’s refined oil market. Meanwhile, with the temperature getting higher, the operating rates in the infrastructure industry continued to move up, and the logistics industry became more active. Thus, the overall demand for diesel improved. Market participants replenished stocks intensively, so the sales of diesel at state-owned and independent refineries performed well. The diesel prices rose to some extent. Moreover, the demand for gasoline remained unchanged, and the overall increase in the gasoline prices was limited due to the sluggish market trading activity. Up to March 27, China’s 0# diesel prices reached RMB 6,065/mt, up RMB 57/mt from March 14, and China’s 92 Ron gasoline prices increased by RMB 33/mt.

Later, the international crude oil prices will remain high, giving strong support to China’s refined oil market. Meanwhile, the overhauls at the domestic refineries will increase, so the refined oil supply will decline somewhat. Moreover, the operating rates in the infrastructure industry will keep rising, so the demand for diesel will continue to rise. With the approach of the Tomb-Sweeping Day holiday, the demand for gasoline will improve to some extent. On the whole, SCI estimates that China’s gasoline and diesel prices will continue to move up.