Apr Shandong Independent Refinery Refined Oil Price Forecast

Apr ShandongIndependent Refinery Refined Oil Price Trend Forecast

According to SCI, up to March 26, 2019, the price spread between diesel at Shandong independent refineries and crude oil was RMB 1,849/mt, up RMB 61/mt Y-O-Y. Meanwhile, the price spread between gasoline at Shandong independent refineries and crude oil was RMB 1,894/mt, down RMB 550/mt Y-O-Y.

From March 7, the prices of gasoline at Shandong independent refineries kept fluctuating and showed no signs of decreasing or rebounding. Meanwhile, the volume of gasoline purchased by state-owned refineries remained tepid, and the supply-demand fundamentals of gasoline stayed relatively stable. Therefore, the prices of gasoline at Shandong independent refineries remained at lows. Moreover, from March 15, the demand for diesel remained stable-to-decreasing.

To predict the price trends of gasoline and diesel at Shandong independent refineries in April, attention should be paid to the historical price trends of gasoline and diesel at Shandong independent refineries, the export of refined oil, etc.

According to the price spreads between gasoline at Shandong independent refineries and crude oil in every April from 2015 to 2018, the price spreads in April remained largely unchanged from March, and the price spreads in April inched up from March in part of the years. Currently, the prices of gasoline remain at lows from those before the Spring Festival and show no signs of revival.

Meanwhile, from the beginning of 2019, the discounts at gas stations kept decreasing, affecting the retails and wholesales at Sinopec and PetroChina. Since the retail volume decrease can directly affect the profits at state-owned refineries, SCI predicts that firstly, the discounts at gas stations will revive to seize retail market share in advance. Secondly, the increase of retail refined oil sales volume will affect the inventory at oil tanks and state-owned refineries’ refined oil purchase plans, and finally it will affect the gasoline wholesale market.

Currently, the prices of gasoline at Shandong independent refineries stay at lows. According to the historical prices, the prices of gasoline are likely to surge from late March to the Qingming Festival holiday. After the Qingming Festival holiday, the gasoline market in April will be influenced by a large number of factors. On the whole, the prices of gasoline will be stable-to-rising.

Meanwhile, according to the statistics from the past four years, the demand for diesel in April is unlikely to keep increasing. Moreover, the prices of diesel at Shandong independent refineries remained relatively reasonable, and the price trends of diesel in April of the past years were irregular. Therefore, SCI reckons that the prices of diesel in April will keep fluctuating, and speculations will remain. Besides, players should pay attention to the refined oil export market.

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