In November, Shandong Local Refineries' Gasoline and Diesel Prices Show Divergence

November 28th, according to news,

According to the commodity market analysis system, the price trends of gasoline and diesel from Shandong local refineries in November showed some divergence. By the end of the month, the price of 92# gasoline in China was 7117.6 CNY/ton, with a slight increase of 0.15% in November, and the gasoline market price was mainly fluctuating. The price of 0# diesel in China was 6498 CNY/ton, with an increase of 1.71% in November.

Cost aspect: Crude oil market fluctuations lead to changes in refined oil products

Crude oil market prices have been experiencing wide fluctuations. As of the 27th, the U.S. futures market was closed for Thanksgiving. The settlement price for the February Brent crude oil futures contract was reported at $62.87 per barrel. The crude oil market is being influenced by both bullish and bearish factors. On one hand, OPEC+ oil-producing countries have announced a new round of production increases, and the market remains concerned about the long-term risk of oversupply, which is putting downward pressure on crude oil prices. On the other hand, geopolitical factors have led to a reduction in Russian supply, and the easing of U.S. tariff issues has provided positive news for the international crude oil market, driving crude oil prices higher. The crude oil market directly affects China's refined oil market, causing Chinese gasoline and diesel prices to rise slightly.

Supply side: Shandong independent refineries maintain operations, ensuring normal supply of refined oil products in China.

Recently, some local refining units in Shandong have increased their operating loads, but the overall operating rate has not changed much, with the average operating rate of local refineries in Shandong remaining at around 54%. The operating rate of major refineries across China is maintained at around 80%, and the supply of refined oil products from local refineries remains stable. The supply of gasoline and diesel in Shandong has not changed significantly, and the price increase of gasoline and diesel in Shandong is limited.

Demand Side: Demand is decent, gasoline fluctuates while diesel rises

In terms of gasoline, residents' travel and other activities are mainly normal. Additionally, with the recent fluctuations in the crude oil market, it is difficult for China's gasoline end consumption to see an increase, and demand is relatively stable but weak. However, the increasing popularity of new energy vehicles has led to lower-than-expected demand, resulting in a fluctuating gasoline market.

For diesel, the supply side of the recent diesel market is normal, and demand is still primarily driven by essential needs. In November, there has been a decrease in rainy weather, leading to accelerated construction and infrastructure projects. Traditional industries provide a base level of support. Additionally, autumn planting in the early part of the month and the e-commerce festival have increased the activity in the logistics and transportation sectors. The demand for marine fuel has also increased. Furthermore, the switch to -10# diesel in northern regions has contributed to a slight increase in the diesel market.

Market Forecast: Recently, risks on the crude oil supply side have yet to be eliminated, and international oil prices are expected to remain weak and volatile in the short term, providing limited cost support for China’s refined oil market. In China, refinery operating rates have remained relatively stable in the short term, resulting in a generally ample supply of refined oil products. As for gasoline, daily demand remains steady, making it difficult for prices to gain significant upward momentum. There are currently no positive factors driving diesel demand, and overall performance is average. We expect that gasoline and diesel prices will continue to fluctuate in the near future.