China Refined Oil Prices Inched Up

The international crude oil prices hovered at highs, as multiple bullish factors gave support to the prices. Besides, according to the data from EIA, the crude oil stock in the U.S. increased beyond expectation, weighing down the international crude oil prices. However, influenced by the high international crude oil prices, China’s crude oil prices fluctuated upward.

The domestic crude oil prices fluctuated upward, giving support to the market sentiment. As for the diesel market, although the operating rate in the large-scale construction work industry, industrial and mining enterprises recovered to some extent, the overall operating rate remained low. Thus, the increase in the diesel demand was limited. Earlier, influenced by the increase of diesel price, most market participants stocked up. Thus, the inventory at downstream users was relatively high, and most downstream users showed weak interest in purchasing resources. Curbed by the sales pressure, the offers at some state-owned refineries inched down. Many independent refineries raised the diesel prices with bullish sentiment. On the one hand, most independent refineries expect that the demand for diesel will increase to some extent in the future. On the other hand, as the units at Shandong Wanda Tianhong Chemical will take overhauls in April, the overall diesel supply will slightly drop. Meanwhile, some market participants still held wait-and-see sentiment towards the diesel market.

Later, there will still be many state-owned and independent refineries taking overhauls. According to SCI’s statistics, the shutdown capacity at independent refineries will surpass 20,000kt/a from April to June, resulting in the decline in the refined oil supply. Besides, with the approach of the Tomb-Sweeping Day and the Labor Day holidays, the demand for gasoline will grow to some extent. Moreover, as the downstream demand of diesel will improve, the trading activity in the diesel market will further recover. The sales at state-owned and independent refineries will grow, slightly lifting the diesel prices. On the whole, China’s refined oil prices will rise somewhat in the near future.