China Traditional Independent Refineries Facing Low Refining Margins
As of July 22, the overall average oil-refining profit at Shandong independent refineries was RMB 36.9/mt, up RMB 6.5/mt from last week. The theoretical feedstock cost at refineries moved up from last week. As for the oil refined products, sales of gasoline was passable, and the prices mostly rose. However, the diesel was mostly purchased at a low price in a bid to replenish inventories, and thus diesel prices fluctuated relatively. Overall, the magnitude of gasoline and diesel price rise was larger than the price decline. Sales increased. In addition, the magnitude of sales increase was larger than that of feedstock cost. All in all, the overall oil refining profit at Shandong independent refineries increased.
Next week, the international crude oil price will move sideways at a high level, and it won’t likely make a breakthrough. In addition, it’s predicted that the magnitude of price drop will be larger than that of price rise. Thus, the theoretical feedstock cost at refineries will likely move down. Next week, the gasoline price will likely move up further, while the diesel price will fluctuate. Overall, both the diesel and gasoline prices will move up. The theoretical oil refining profit at Shandong independent refineries will continue rising next week.
