Refined product oil price or stranded under the new mechanism

The new pricing mechanism for refined oil products after the Ching Ming Festival will be implemented for the first time. If the refined oil price adjustment window opens on April 10, it will become the first refined oil price adjustment since the introduction of the new mechanism.

Since the highest retail price of refined oil was lowered on March 27th, the international crude oil market experienced six consecutive gains. Then, under the pressure of poor economic data in Europe and the United States, international oil prices plunged by nearly 5% for three consecutive days.

As of the close of April 5, the London May Brent crude contract fell by $2.22, down 2.09% from the previous trading day.

Analyst Han Jingyuan said that during the domestic Ching Ming holiday period, crude oil suffered successive downturns in economic data and rising inventory pressure, and the price decline was hard to stop.

In accordance with the refined oil pricing and improvement mechanism, based on the domestic crude oil import structure and the settlement and affiliation varieties, Treasure Island selected four types of crude oil as reference, namely Brent, Brent DTD, Dubai and ESPO.

According to calculations, as of the seventh working day of April 7, the reference crude oil varieties (Brent, Brent DTD, Dubai, ESPO) had a rate of change of 0.6%, and the rate of increase was smaller than before the holiday.

According to calculations, compared with the average price of the previous 10 working days, WTI crude oil prices rose by 2.65% in the past 8 working days, while Brent crude oil fell by 0.08%. Dubai, Xinta and Oman crude oil prices rose respectively. The trend, only Brent crude spot DTD showed a slight decline.

Han Jingyuan believes that the price adjustment window originally scheduled for April 10 will be closed temporarily due to an increase of less than RMB 50/tonne or RMB 0.05/liter.

The new pricing mechanism for refined oil clearly stated that if “the price adjustment is lower than 50 yuan per ton, no adjustment will be made and the cumulative or offset will be included in the next price adjustment”.

“Overall, as of now, the domestic refined oil is still within the price increase range.” Chen Qing, an analyst at Zhuo Chuang said, “When the company meets 10 working days, the adjustment range of domestic refined oil may be less than RMB 50 yuan. Tons, but no adjustment is made."

The rate of change of the rate of change in the refined oil product price index of Anxun Siswangwang indicated that as of April 5, the rate of change index was 0.68%, and on April 10th, the price adjustment rate was forecast to reach RMB 40/t. In the next few working days, the average price of Brent ** will drop to US$109/barrel. The increase in the retail price of refined oil products may approach the threshold of 50 yuan/ton, making it difficult to realize the retail price of refined oil products next week.

Han Jingyuan analyzes that if the price adjustment window is closed, the calculation period will be recalculated, and the next cycle time point will be delayed or will be April 24-25.

The introduction of a new pricing mechanism for gasoline and diesel middlemen who have chosen to wait and see the refined oil products has made traders in the refined oil market even more confused. Almost all middlemen have stated that frequent adjustments in retail prices not only increase risk, but also do not adjust for two weeks. Big, speculative profits have been greatly reduced. In the coming period, they will choose to wait and see, and the replenishment cycle will also narrow to around a week.

Sinopec and CNPC are also secretly ranting because the overall tone of the refined oil market this year is oversupply. If speculative demand is suppressed by the new pricing mechanism, especially in the second quarter and early third quarter, the demand for diesel is off-season, rigid demand is not supported, and sales are late. The task is difficult to accomplish.

Due to the poor sales in March, the sales volume of the two giants around the country has a deficit of about 30%, and the sales progress of individual regions even only completed 50%.

It is estimated that due to the weak supply and demand relationship in the second quarter, the domestic diesel inventory is expected to remain at a level of more than 30 days, which means that domestic diesel resources will have a surplus of 2 million to 3.5 million tons per month.

The "two barrels of oil" refinery peaked during the period from the end of March to mid-May. April was the lowest point of diesel supply in the second quarter. In June, supply rebounded to a record high.

“In April, the reduction in crude oil load due to overhaul was 2.51 million tons, and in May it was 1.71 million tons. In the second quarter of this year, the amount of crude oil processed in the refinery due to overhaul was almost the lowest in the past five years.” The analyst said.

At present, all parties in the refined oil market have disagreement on the trend of oil prices, and the supply of gasoline and diesel in the domestic market is the oversupply-driven demand. After the price adjustment, the market volume of the refined oil market is slightly better than that before the price adjustment, but it is still a light situation. .

April was the fiscal year of Europe and the United States. The relative reduction in investment activities was not enough to support higher oil prices. Coupled with the frequent occurrence of debt crisis, international crude oil prices in recent months from April to May showed a downward trend.