Late April China Diesel Inventory Proportion Increased M-O-M
From April, due to the continuous output decrease in OPEC member countries, the geopolitical tensions in the Middle East and the U.S.’s sanctions on Iran’s crude oil export, the international crude oil prices fluctuated upwards, and China’s retail ceiling prices of gasoline and diesel experienced two increases in April 13 and April 27. Therefore, most participants held optimistic attitudes toward China’s refined oil market. Moreover, in late April, with the surge of international crude oil prices, participants increased their replenishment. Besides, the operating rates at plants, mines and constructions increased in April, and the agricultural demand for diesel grew as well. Therefore, participants increased their diesel purchase, and up to April 26, China’s diesel inventory proportion at refined oil traders was 25.71%, up 1.97% M-O-M.
According to SCI, though the expectation to international crude oil prices is optimistic, participants should pay attention to the price decline risk caused by the potential output increases in OPEC member countries and Russia. Next week, the international crude oil prices are likely to remain fluctuating, giving thinner support to China’s refined oil market. Moreover, in late April, China’s diesel participants increased their inventory replenishment. Therefore, SCI reckons that China’s diesel market will become tepid in early May, and China’s diesel inventory proportion is likely to inch down in mid-May.
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