SunSirs: Crude Oil Fluctuates during the Cycle, and the Retail Price of China Refined Oil Products will not be Adjusted temporarily in This Round

The domestic refined oil price adjustment window for this round opened at 24:00 on December 18th. The retail price of refined oil will not be adjusted for the time being. The retail price in 2024 has experienced nine upward adjustments, nine downward adjustments, and six stranded adjustments. The crude oil market is mainly volatile during the cycle, and the retail price adjustment of refined oil in 2024 will encounter a "seventh" setback.

Entering this pricing cycle, the international oil price market is mainly volatile. As of the 17th, the settlement price of the main contract for WTI crude oil futures in the United States was $69.65 per barrel, and the settlement price of the main contract for Brent crude oil futures was $73.19 per barrel. During this cycle, crude oil prices have fluctuated narrowly with little overall change. On the one hand, the geopolitical tension between Russia and Ukraine has escalated, and the United States has announced a new round of sanctions against Russia. In addition, OPEC+may extend its production reduction plan again at the December meeting, and it may be postponed until the second quarter of next year. This news is positive for international oil prices. On the other hand, the weak demand in the international crude oil market and investors' concerns about the prospect of oversupply in the crude oil market still exist, which is bearish on the oil market. Overall, the adjustment of crude oil change rate during the cycle is not significant. As of the 18th, the change rate of crude oil varieties on the tenth working day was -0.16%, corresponding to a 5 RMB/ton reduction in domestic gasoline and diesel retail prices, which did not touch the adjustment red line of 50 RMB/ton. Therefore, the retail price of refined oil products will not be adjusted for this round.

In terms of gasoline, the operating rate of local refineries is still at a low level recently. The average operating rate of Shandong refineries is around 57%, and the operating rate of major refineries nationwide is around 84%. The supply of refined oil products is relatively mild. Recently, there has been no holiday support, and travel has returned to normal. The continuous penetration of new energy vehicles has had a certain impact on gasoline demand. However, with the increase in main external procurement and the concentration of market traders' purchases, the sales volume of locally refined gasoline ships has increased, and the trend of the gasoline market is still promising.

In terms of diesel, there has been little change in the supply side diesel market recently. In terms of demand, the demand for marine fuel has been relatively normal recently, but agricultural diesel has come to an end. In addition, with the decrease in temperature and the gradual decline in outdoor project construction, there has been little change in diesel inventory. Traders and end enterprises are cautious in their procurement operations. Overall, the trend of diesel prices is weak and volatile.

At present, the crude oil market is mixed with bearish factors, and geopolitical instability continues to affect the market. The protection of OPEC+production reduction atmosphere still exists, but the pessimistic demand will still suppress oil prices. Overall, the international crude oil market is mainly volatile. From a domestic perspective, the operating rate of refineries remains low in the short term, and the supply of refined oil products is relatively normal. The sales of gasoline ship orders have increased, and intermediaries are actively purchasing. In addition, many local operating units have completed their annual sales targets, and many are implementing the high price Poly policy, which still supports the gasoline market price; In terms of diesel demand, with the gradual weakening of demand and the reduction of diesel usage, traders and end enterprises are cautious in their procurement operations, and the diesel market situation is generally average in the short term.

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