SunSirs: Negative Rate of Change, Retail Price of China Refined Oil Products Lowered for the first Time in 2025

The domestic refined oil price adjustment window opened at 24:00 on February 19th, and the retail price of refined oil is about to be lowered. In 2025, the retail price of refined oil has experienced two upward adjustments and one stranded. During this cycle, the crude oil market fluctuated at a low level, and the crude oil change rate remained negative. The retail price of refined oil in 2025 will usher in the "first" downward adjustment.

Entering this pricing cycle, the international oil price market is fluctuating at a low level. As of the 5th, the settlement price of the main contract for WTI crude oil futures in the United States is $71.85 per barrel, and the settlement price of the main contract for Brent crude oil futures is $75.84 per barrel. During this cycle, crude oil prices fluctuated at a low level. On the one hand, the United States imposed tariffs and Trump demanded OPEC to increase production to lower oil prices. On the other hand, with high US crude oil inventories, concerns about crude oil demand still exist in the market, which has suppressed crude oil prices; On the other hand, the geopolitical situation between Russia and Ukraine has eased, and crude oil market prices remain low. Overall, the crude oil change rate remained negative during the cycle. As of the 19th, the change rate of crude oil varieties on the 10th working day was -3.15%, corresponding to a reduction of 170 RMB/ton for domestic gasoline and 160 RMB/ton for diesel, which is equivalent to a reduction of 92# 0.13, 95# 0.14, and 0# 0.14 RMB per liter.

In terms of gasoline, the operating rate of local refineries is still at a low level recently. The average operating rate of local refineries in Shandong is around 44%, and the operating rate of major refineries nationwide is around 80%. The supply of refined oil from local refineries has decreased. However, gasoline demand has entered a temporary off-season, and gasoline terminal consumption has returned to residents' daily short distance travel as the main trend. The pace of vehicle sales is slow, and the frequency of terminal gas station purchases is low. In addition, the continuous penetration of new energy vehicles has brought certain impacts on gasoline demand. Overall, under the influence of negative factors, the gasoline market trend has declined.

In terms of diesel: Recently, the supply side of the diesel market has remained low, while demand has rebounded for some industrial and mining infrastructure as well as logistics oil orders. The pace of vehicle sales has accelerated, but the low crude oil market has suppressed the diesel market. In addition, the decline in diesel exports has had a combined impact of long and short positions. Overall, the recent diesel price market has slightly increased.

Looking at the future, there are currently many favorable factors supporting the crude oil market, and geopolitical instability continues to affect the market. However, with the United States increasing crude oil production and the Federal Reserve slowing down interest rate cuts, crude oil market prices are expected to fluctuate in the short term. From a domestic perspective, the short-term refinery operating rate remains low, the supply of refined oil products alleviates market pressure, and the demand for gasoline weakens. In addition, the impact of new energy cannot be underestimated, resulting in a main decline in gasoline market prices; Although diesel is affected by the negative impact of crude oil, with the rise in temperature and the continuous restart of diesel demand in the later stage, diesel has shown an upward trend.

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