Domestic oil prices are expected to stay on hold today

In a gas station in Taiyuan, Shanxi, private car owners line up to refuel. China News Agency issued Wei Liang photo

China News Service, Beijing, August 18th The new domestic oil price adjustment window will open at 24:00 on August 18. Due to the decline in international oil prices, the agency predicts that the current price adjustment of refined oil products will usher in the fourth strand of the year.

During the current cycle, U.S. crude oil inventories continued to decline, but OPEC crude oil production hit a record high in July 2015, and Saudi Arabia’s implementation of reduced production was also reduced. Under the long-short game, the international crude oil price fluctuated.

As of the close of local time on August 16, US WTI crude oil futures closed down 1.62% at $46.78 per barrel; Brent crude oil futures ended down 1.04% at $50.27 per barrel.

Affected by the continuing downward trend in international crude oil prices, the current round of domestic oil price increases have narrowed continuously. Many agencies predict that on the 18th, the adjustment of domestic refined oil products may be stranded.

International crude oil futures charts. Source News

According to the current pricing mechanism for refined oil products, the domestic oil price is “a ten-day shift,” and if the price adjustment is less than RMB 50/ton, no adjustment will be made. The unadjusted amount will be added or offset during the next price adjustment.

The Zhuo Chuang information monitoring model shows that as of the close of August 16th, the reference rate for crude oil in the country’s ninth working day was 0.78%, corresponding to an increase of 27 yuan/ton for gasoline and diesel.

According to another survey by Zhongyu Information, the change rate of crude oil in the 9th working day of the current round was 1.45%, and it is expected to increase by 50 yuan/ton temporarily. At present, the increase in oil prices on the 18th will continue to narrow, and the possibility of stranding is not ruled out.

Xue Shan, oil product analyst Xue Shan also believes that there is only one working day away from the price adjustment, is expected to change the rate of late crude oil or extend the decline, the corresponding increase in oil products does not meet the price adjustment conditions.

Since 2017, the domestic retail price limit for refined oil products has gone through 6 rounds, 6 ups, and 3 rounds, and a total of 15 rounds of pricing cycles. As of the end of the previous round of price adjustment, gasoline and diesel were down 355/ton and 340 yuan/ton during the year. After the price adjustment, the price adjustment bureau will be changed to "six up, six down, four down".

Data map: Taiyuan, Shanxi, gas station staff refueled vehicles. China News Agency reporter Zhang Yunshe

Xue Shan predicted that the international crude oil inventories decline will be reversed, OPEC crude oil production continues to increase the exacerbation of the market oversupply concerns, signs of the downward trend in crude oil prices appear, the market volatility is expected to end, you need to be vigilant to tumble risks.

In the domestic retail market, Li Yan, an oil analyst with Longzhong Information, said that the recent price wars between main gas stations and private gas stations have passed, but the preferential policies are still continuing. Many Sinopec and PetroChina's gas stations have a time limit of 1.2-1.3 yuan per liter, while private gas stations have a preferential rate of 0.5-1.5 yuan per liter.

However, Zhongyu Information analyst Yan Changxi believes that the domestic crude oil situation is unlikely to improve. It is expected that the price of domestic refined oil products will continue to decline steadily. With the increase in sales pressure, it is possible not to rule out the possibility of major gas station price reductions.