China Diesel Price to Continue Rising

As crude oil price began to rebound in the latter half of the year, the Change rate of crude oil prices was positive and continued to rise, driving the bullish sentiment in the refined oil market. Some players carried out restock at the end of the month.

Before the opening of the refined oil price adjustment window on July 23, due to the strong price cuts in the market, the refined oil prices showed a downward trend as a whole at the state-owned refineries, and the wholesale price fell in some areas by around RMB 300/mt. However, as the crude oil price rebounded after price adjustment, the price increase of the china’s refined oil market reappeared again. The price of refined oil at the state-owned refineries rebounded by RMB 200/mt in the last week. In terms of independent refineries, due to the increase in feedstock costs, the Shandong independent refineries operating rate remained low at the end of this month. Therefore, although the crude oil price fluctuated, the refined oil price was still showing a rising trend at the independent refineries in the latter part of the year.

SCI believes that if there is a conflict between the United States and Iran, oil prices will rise rapidly in a short time. Second, the easing of the US-European trade situation and the summer driving in North America boost demand for crude oil. Finally, the uncertainty in the output of OPEC oil producers also boosts the oil market. Based on the above factors, it is expected that the international crude oil will continue to fluctuate and rise in the future. In addition, China’s demand for refined oil is currently relatively strong, therefore, it is expected that China’s diesel price will continue to rise in the next cycle.