China Blended Oil Market Trended Flat

In the earlier stage, supported by multiple bullish factors, downstream users were active in purchasing blended gasoline and diesel resources. Therefore, the dealing prices continued to move up. With the bullish support faded away, China’s blended oil prices trended flat, and the market sales atmosphere weakened gradually.

The international crude oil prices surged, giving support to China’s blended oil market sentiment. Meanwhile, downstream users were active in replenishing resources, so the market atmosphere performed well. Moreover, the demand for diesel was stronger than that for gasoline, and the overall diesel prices increased by RMB 200-300/mt accordingly. Therefore, most blenders were active in raising the blended oil prices.

Besides, prices of some blended oil feedstock rose to a high level, so most downstream users showed resistance to the high-priced feedstock. As most downstream users purchased blended oil feedstock on a need-to basis, it was tough for refineries to further raise the blended oil prices. According to SCI’s statistics, up to April 16, China’s average MTBE price was RMB 6,106/mt, unchanged from last week. And the average alkylated oil price in Shandong was RMB 5,854/mt, down RMB 13/mt from last week. As the cost gave limited support to the blended oil market, the blended oil prices were relatively stable.

The growth of the international crude oil prices slowed down, giving thin support to China’s blended oil market. Meanwhile, as the refined oil prices increased to a high level and most downstream users had completed the replenishment, the trading atmosphere became sluggish. The blended oil prices at state-owned and independent refineries trended steadily. Thus, blenders were cautious about their operations, and the blended oil offers were largely stable.

Currently, the overall demand for blended gasoline and diesel is sluggish, as most downstream users consume the stocks. Therefore, the newly added orders are few. Meanwhile, with the sales at state-owned and independent refineries trending steadily, some refineries will cut the blended oil prices to promote sales. On the whole, SCI reckons that the increase in China’s blended oil prices will be limited.