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International crude oil futures prices fluctuated and fell on May 10 due to concerns about the outlook for U.S. oil demand. At the end of the day, light crude oil futures for June delivery on the New York Mercantile Exchange fell $1, or 1.26%, to settle at $78.26 a barrel.
While international oil prices fluctuate, domestic oil price adjustments are also about to usher in a new window. According to the domestic refined oil pricing mechanism, the 10th oil price adjustment this year will be carried out at 0:00 on May 16.
Looking back on the trend of oil prices since the beginning of this year, it is not difficult to find that domestic oil prices have experienced many ups and downs. So far, oil prices have experienced 5 increases, 2 declines and 2 stranded adjustments this year. Although the oil price has been raised by 925 yuan/ton for five rises, it has only decreased by 120 yuan/ton for the two declines, which has led to a cumulative increase of 805 yuan/ton for oil prices this year, that is, an increase of 0.63 yuan to 0.78 yuan per liter.
However, with the fluctuation of international oil prices and the changes in supply and demand in the domestic market, the trend of oil price adjustment is also changing. According to the monitoring data of professional institutions, on May 10, that is, the sixth working day in China, the reference crude oil change rate was negative 4.51%, which indicates that oil prices will likely fall. According to the current forecast, oil prices will be lowered by 210 yuan/ton, equivalent to 0.16 yuan to 0.19 yuan per liter. Next week, oil prices are on track for their biggest drop so far this year.
Changes in oil prices are affected by a variety of factors, including supply and demand in the international crude oil market, geopolitical risks, and the global economic situation. As a result, there is still uncertainty about the future direction of oil prices.
Analysis of China's oil product production
From 2015 to 2018, China's refined oil output maintained a steady upward trend, with 360.34 million tons of refined oil output in 2018, a year-on-year increase of 0.6%; Due to factors such as the slowdown in domestic macroeconomic growth and the recession of downstream industries, China's refined oil output in 2019 was 360.316 million tons, a year-on-year decrease of 0.01%. In 2020, the global epidemic led to a decline in the demand for refined oil, and the domestic output of refined oil also shrank, only 331.26 million tons, a year-on-year decrease of 8.06%. In 2021, the output of China's three major refined oil products (gasoline, kerosene, and diesel) reached 357.382 million tons, a year-on-year increase of 7.9%. From January to November 2022, the output of China's three major refined oil products reached 332.381 million tons, including 133.705 million tons of gasoline, 26.815 million tons of kerosene, and 171.861 million tons of diesel.
Prospects for the development of China's refined oil retail industry
To sum up, there is a problem of overcapacity in the mainland refined oil market, but with the gradual implementation of the national dual carbon strategy, it is expected that the supply of refined oil in the mainland will show a situation of reducing capacity and controlling production in the next few years. From the demand side, as positive progress has been made in epidemic prevention and control, the demand for refined oil for public transportation and foreign refined oil will recover, and the demand will gradually recover.
In 2020, the sales volume of refined oil products: Sinopec leads
Judging from the sales volume of refined oil, in 2020, due to the impact of the epidemic, the demand for refined oil in mainland China declined. Thanks to a good sales system, in 2020, Sinopec's refined oil sales volume was 218 million tons, while PetroChina's sales volume was only 161 million tons.
The Price Monitoring Center of the National Development and Reform Commission predicts that oil prices will be dominated by shocks in the short term. From the perspective of production, "OPEC+" still has the will to stabilize the current price level, although the geopolitical conflict has eased, the turmoil still exists, and the supply of crude oil is still at risk of damage; From the perspective of demand, the traditional fuel consumption season has not yet arrived, and it is difficult for short-term demand to improve greatly. Therefore, tight supply and weak demand will jointly affect oil prices to be range-bound.
Morgan Stanley has warned that fuel prices could rise sharply this summer, which could catch investors off guard. A slowdown in U.S. shale oil production and an unstable start in Brazil and Canada could lead to a significant reduction in summer crude oil market inventories.
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For more research and analysis of this industry, please refer to the "Market Research and Investment Forecast Analysis Report of China's Refined Oil Industry" by Qianzhan Industry Research Institute
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