Demand Impacts Divergent Trends in Shandong Refinery Gasoline and Diesel Prices

February 13 news

According to the commodity market analysis system, the recent price trends of gasoline and diesel from Shandong local refineries have shown some divergence. As of the 13th, the price of 92# gasoline in China was 7,384.6 CNY/ton, with a weekly increase of 1.95%; the price of 0# diesel in China was 5,739.4 CNY/ton, showing a decline of 0.88%.

Cost aspect: Crude oil market fluctuates, support for refined oil costs in China is evident

Crude oil market prices have been characterized by volatile fluctuations. As of the 12th, the settlement price for the March WTI crude oil futures contract in the U.S. stood at $62.84 per barrel, while the settlement price for the April Brent crude oil futures contract was $67.52 per barrel. Supported by multiple positive factors—including supply disruptions caused by the winter storm in the U.S. and escalating geopolitical tensions in the Middle East—the international crude oil market has shown an upward trend. However, market participants remain pessimistic about the outlook for crude oil demand, as the global economic downturn continues to weigh on oil prices, resulting in wide-ranging fluctuations in the crude oil market recently. The crude oil market situation directly affects China’s refined oil market, and prices for gasoline and diesel in China have remained relatively stable.

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

Recently, the operation of refineries in Shandong has been relatively stable, with little change in the operating rate. The average operating rate of Shandong's independent refineries is around 52%. Recently, the operating rates of major refineries across China have slightly increased, as Sinopec and CNPC have raised their daily processing loads in February, leading to an increase in inventory levels for some units. The social inventory of crude oil is still acceptable, which has a certain impact on the refined oil market.

Demand Side: Different Demands Lead to Divergent Trends in Gasoline and Diesel Markets

In terms of gasoline, with the approach of the Spring Festival holiday, there is an increase in resident travel and other activities, more vehicles are returning to their hometowns, and the usage frequency of private cars has increased, leading to a rise in the demand for gasoline in China. However, the continuous improvement in the adoption rate of new energy vehicles has resulted in the demand not meeting expectations, and the gasoline market trend shows a slight increase. Regarding diesel, outdoor end-use oil units have successively stopped work and taken holidays, construction sites and projects across the country have gradually closed for the holiday, and logistics and transportation are also taking breaks as the year-end approaches. As a result, the demand for diesel has become even weaker, and the diesel market trend is declining.

Outlook: In the short term, oil prices will still be dominated by supply disruptions and geopolitical risks. Recently, with supply disruptions not yet fully subsided, rising geopolitical risks, and strong expectations of OPEC pausing production increases, oil prices are likely to experience wide fluctuations. In China, refinery operating rates are expected to remain largely unchanged in the short term, with normal supplies of refined oil products. For gasoline, demand is expected to increase due to the Spring Festival, leading to a potential rise in gasoline prices. As for diesel, there are no positive factors supporting demand, and the overall performance is expected to be weak.