Refined oil price increase

Industry sources said that if domestic crude oil prices continue to rise during the Chinese New Year holidays, domestic refined oil products are expected to open after the window festival.

International oil price continued to rise Although the international oil price rose on February 4th, there was a correction, but in the view of market participants, the overall upward trend of international crude oil prices will remain unchanged, and will return to rising momentum after the callback. "Geological and political factors and related economic data are the main factors affecting the trend of oil prices." Zhuo Chuang analyst Li Qian said that the current crude oil market is in the peak season of traditional consumption, and favorable factors have an advantage. In early January, the expansion of the US Pipeline Pipeline and Saudi Arabia's production cuts supported the formation of oil prices. Then the turbulent situation in the Middle East caused concern to the market and continued to push up the price of oil. At the end of January, the U.S. debt ceiling was delayed, which eased the market's concerns about the financial crisis. Coupled with the continued implementation of easing policies, the economic data of major economies generally improved, and international oil prices continued to rise.

"In the context of a sustained economic recovery, the continuous injection of liquidity and the rebound in market risk appetite have added weight to the continued upward movement of crude oil prices." It is expected to oscillate and rise, but subject to the global oil oversupply pressure, the upward trend of crude oil prices will not be too smooth. To break the $100/barrel barrier, strong support is still needed.

The domestic oil price increase is expected to be strong. The monitoring data of the Business Society show that as the international oil price rises, as of February 4, the change rate of crude oil in the three places was 1.99%. The rising rate of crude oil in the three places played an active role in the market mentality.

At the same time, affected by hazy weather, on February 1st, Sinopec announced that before the end of this year, 12 subordinate companies’ equipments for upgrading and dismantlement would be completed and put into production. From next year onwards, China’s four standard oil products will be fully supplied. “Sinopec's “oil product door” has caused consumers to worry that the overall upgrade of oil products will increase the cost, which in turn will result in an increase in oil prices, and this part of the upward adjustment will probably be transmitted to consumers.” Li Hong said that in the context of rising international crude oil prices, the “oil product door” will further strengthen domestic oil price expectations.

At present, most of the major oil products sales companies are bullish on the market, and some of them are starting to push up diesel prices tentatively, which is around 50 yuan/ton. “However, as the Spring Festival approaches, industrial and mining companies and infrastructure companies have suspended work, logistics companies have also been suspended, and the demand for diesel terminals has further contracted. Before the Spring Festival holiday, gasoline consumption was relatively stable. In most parts of China, gasoline and diesel prices remained stable. Mainly, there was no noticeable boost in trading, and traders were still waiting to see the mood. Li Qian said.

According to the current "Administrative Measures on Oil Price (Trial)", the current price adjustment of refined oil products has been met within 22 working days, and can be raised only by reaching a rate of change of 4%. In Li Hong's view, if the price of crude oil in the later period and the rate of change in the three places of crude oil continue to rise in the near future, the upward pressure on refined oil prices will increase. “The fastest increase after the Lantern Festival is that it will usher in the first increase in refined oil prices in 2013, which is expected to be around RMB 300/t.” He believes that if the rate of change rises above 4%, it is in the traditional Chinese New Year holidays. In order to ensure the use of oil during the Spring Festival, the first price adjustment in 2013 may be postponed.