Domestic oil prices were lowered again in mid-May and are expected to fall sharply
After a slight downward revision in April, domestic refined oil prices remained at a high level. However, as international crude oil prices continued to fall sharply in early May, the industry expects that domestic refined oil prices will usher in a significant decline in mid-May.
Oil prices fell slightly in April
Since 2023, affected by the high international crude oil prices, domestic refined oil prices have experienced several consecutive months of increases. Until late April, domestic gasoline prices were finally lowered for the first time on April 24 after six rounds of increases. However, due to the large increase in the previous accumulation, the single reduction of 15 yuan/ton was small, which still failed to fully offset the previous upward impact.
On May 1, with the opening of a new round of price adjustment cycle, gasoline prices were slightly reduced by 15 yuan/ton again. However, on the whole, the current price of refined oil is still at a relatively high level, which has brought a lot of fuel burden to the majority of car owners.
International oil prices fell sharply
Since the beginning of May, international crude oil futures prices have continued to fall sharply. From May 1 to 5, affected by the weak demand outlook and the Fed's expectation of interest rate hikes, international oil prices fell by more than 6% in just five trading days.
Among them, on May 3 and May 4, oil prices experienced the largest one-day decline in nearly three months, with a cumulative decline of nearly 5% in two days. As of the close of trading on May 5, the main June futures contract on the New York Mercantile Exchange fell $3.43, or 6.03%, to $53.54 per barrel.
The sharp decline during this period has gradually moved oil prices away from the year-to-date highs set in March this year and regained the lows of early April.
Domestic oil prices may fall sharply
The adjustment of domestic refined oil prices mainly refers to the changes in international crude oil prices during the "20 working days period when domestic and foreign prices are generated". The price adjustment cycle in May will start on May 1, and there are still 10 working days before the next price adjustment window (0:00 on May 16).
As the statistics of the first three working days in May, the decline in international crude oil prices from May 1 to 5 was more than 6%, which was enough to lead to a reduction of more than 170 yuan/ton in domestic refined oil prices. According to the current filling volume, the equivalent of gasoline and diesel is reduced by 0.13-0.15 yuan per liter.
In the next few working days, if international oil prices continue to fluctuate and fall, the room for the reduction of domestic refined oil prices in mid-May will be further expanded. Industry analysts expect that the reduction in domestic oil prices in May will exceed 200 yuan/ton, setting the largest single price adjustment reduction in the year, further easing the burden of car owners.
Market reaction
The domestic oil price reduction is a continuation of the previous price reduction trend, which is conducive to alleviating inflationary pressure and promoting the stable operation of the macroeconomy. The majority of car owners unanimously said that moderately low oil prices are good for travel and transportation, and will bring certain benefits to daily life.
However, some people are worried that the sharp drop in oil prices will affect the development of the domestic energy industry, thus threatening the mainland's energy security. In general, the positive impact of low oil prices on economic development and people's livelihood security is more significant.
At the same time, people also expect that the domestic oil price adjustment mechanism can be further improved, fully absorb the impact of international oil price fluctuations, avoid major fluctuations, and achieve basic stability of domestic oil prices.
In general, the decline in international oil prices created favorable conditions for the reduction of domestic refined oil prices in May. It is expected that domestic oil prices will usher in a significant reduction at that time, further reducing the burden of car owners and injecting new impetus into economic development.