Chinanews.com Client, Beijing, March 12 (Zhang Xu) Recently, international crude oil prices plummeted due to oil price wars. After hitting the largest one-day drop since 1991 on March 9, it continued to hover above the low level of $ 30 per barrel. .
On March 17, domestic refined oil prices will usher in a price adjustment window. Will the "floor price" protection mechanism for domestic refined oil prices be triggered? If the price is adjusted, how much will the domestic refined oil price drop?
Brent crude oil futures price chart.
Domestic oil prices may welcome the biggest decline in history
In the past few days, international oil prices have "fallen and gone." After Russia rejected Saudi Arabia ’s demand for crude oil production cuts, Saudi Arabia launched a crude oil price war, which drastically reduced the price of crude oil sold to markets such as Europe, the Far East, and the United States. The discount rate reached the highest level in nearly 20 years.
On March 9, the light crude oil futures delivered by the New York Mercantile Exchange in April fell 24.59%, and the London Brent crude futures fell 24.19%, the largest one-day drop since the 1991 Gulf War.
In the next two trading days, although OPEC was mediating differences among oil-producing countries, Saudi Arabia and Russia's willingness to increase production limited the rebound in oil prices. As of press time, London Brent crude oil fell 3.87% to $ 35.78 per barrel, while WTI crude oil fell 3.46% to $ 33.17 per barrel.
According to Jinlianchuang's calculation, as of the sixth working day on March 11, the average price of reference crude oil varieties was $ 43.98 / barrel, with a change rate of -18.14%, and the corresponding gasoline and diesel should be reduced by 700 yuan / ton.
In accordance with the principle of "one adjustment within ten working days", a new round of price adjustment window for domestic refined oil products will open at 24:00 on March 17.
According to data from AXIS, the moving average prices of crude oil in the three places referred to by China ’s refined oil pricing mechanism have fallen by nearly 9% to 46 US dollars / barrel for two trading days from 9 to 10 days. If international oil prices continue at 36 US dollars / barrel, Running horizontally, the benchmark price moved to the upper position of $ 40 / barrel.
Li Xun, Director of China Research, Anxim said that due to the influence of international oil prices, the domestic refined oil pricing mechanism may witness the largest decline in the history of nearly 1,000 yuan next Tuesday.
If the price of domestic refined oil is reduced by 1,000 yuan per ton at that time, based on the 50L capacity of a typical private car fuel tank, a full tank of fuel in the future will save about 40 yuan.
Data Map: Sinopec No. 1 Gas Station on Beiyuan Road, Beijing. Photo by Chunyu Cheng
variable! "Floor price" mechanism or secondary trigger
As the international oil price drops below US $ 40 / barrel, will the "floor price" mechanism of domestic refined oil price adjustments become a point of market concern.
The regulation of the "floor price" for the price adjustment of refined oil comes from the notice issued by the National Development and Reform Commission on January 13, 2016. The notice requires that the price formation mechanism of refined oil products be improved, and the marketization of prices be further promoted. The domestic refined oil price regulation be set at "ceiling price" and "floor price".
Among them, the upper limit (ceiling price) is 130 US dollars per barrel, and the lower limit (floor price) is 40 US dollars per barrel. When the international market oil price is higher than 130 US dollars per barrel, the maximum retail price of gasoline and diesel is not mentioned or reduced; when it is lower than 40 US dollars, the maximum retail price of gasoline and diesel is not reduced; when operating between 40-130 US dollars, domestic Refined oil prices were adjusted normally in accordance with the mechanism.
The floor price mechanism was introduced when it was first launched. When the state suspended the adjustment of refined oil prices on December 15, 2015, the international market crude oil prices corresponding to domestic refined oil prices were slightly higher than US $ 40 per barrel. According to the improved price mechanism, the prices of gasoline and diesel at 14:00 on January 13, 2016 decreased by 140 yuan and 135 yuan per ton, respectively.
Data map: Yantai Port West Port area, more than 10 ships including the super-large oil tanker "World Lake" are working intensively. Photo by Hao Guangliang, China News Agency
After a lapse of four years, the international oil price has once again fallen to a low level of less than US $ 40. The agency believes that there are three possibilities for the adjustment of domestic refined oil prices .
First, the domestic refined oil prices have fallen sharply. Xu Na, an analyst at Zhuochuang Information, said: "According to Zhuochuang's data model, if the average price of crude oil anchored in the next few working days of the current round is maintained at $ 36 per barrel, the average price of this round of crude oil will be just $ 40 / Above the barrel or touching the floor price of $ 40 / barrel, the maximum retail price of refined oil will be reduced by around 900 yuan / ton. "
The second is to trigger the floor price mechanism without adjustment. Zhuo Chuang Consulting said from relevant sources that the “floor price” corresponding to the US $ 40 / barrel red line refers more to the average value of multiple oil prices in the current cycle, but it cannot be ruled out that the average price of a single day's comprehensive crude oil is below US $ 40 Barrels, then triggered the floor price mechanism, the possibility of this round of retail oil prices without adjustment.
Third, it is possible to combine macroeconomic control with the current status of domestic refined oil products. Xu Na said, "Although lower prices of refined oil products can stimulate travel, as public health events have not yet completely ended, demand stimulation may be limited. Considering that refined oil products are important national energy materials, and the retail price adjustment of refined oil products this round is biased Large, does not rule out the possibility of initiating macroeconomic regulation and balancing the interests of domestic oil companies and consumers, so as to appropriately lower the price of refined oil products. "
How will low oil prices affect the Chinese economy?
Guotai Junan Securities believes that China is a net oil importer, and falling oil prices will reduce Chinese spending and increase the current account surplus.
According to Guotai Junan's calculations, in 2019, China's total import value is 2.07 trillion US dollars, and oil imports are 240.4 billion US dollars, accounting for 11.6% of total imports. The volume of oil imports is 3.7 billion barrels, and China's average import price is 64.97 USD / barrel (the average price of oil in 2019: 64.39 USD / barrel).
If the price of crude oil stabilizes at US $ 35 / barrel in 2020 and imports remain at 2019 levels, China will save US $ 110 billion in expenditure, accounting for 0.78% of GDP.
The data comes from Guotai Junan Securities.
The plunge in crude oil prices will also reduce transportation costs and help control the ex-factory price index (PPI) and consumer price index (CPI) of industrial products. If the oil price for the whole year is maintained at US $ 40 / barrel, compared with around US $ 60 in 2019, it will fall much. China's PPI in 2020 will be 4 percentage points lower than previously expected to be -4.1%; CPI will be 0.3 percentage points lower than previously expected. Is 3.7%.
In addition, "given that local enterprises are much less subject to supervision by local collection agencies than state-owned oil companies, local refining and private large-scale refining and chemical are expected to benefit from it." CICC said in its research report.
"The triggering of the" floor price "mechanism has created policy arbitrage opportunities for refineries. If oil prices fall further, it will largely stimulate refinery crude oil purchases, and then support crude oil demand." CCB Futures said, low Oil prices may also stimulate China's strategic reserves.
CICC pointed out that the price of Brent crude oil futures has fallen by nearly one-third since the beginning of the year. Considering the characteristics of continuous operation and moving average calculation of crude oil processing costs in the refinery, the refining industry is expected to face a large Loss of inventory. Of course, if the oil price stops rising in the future, the refinery will again enjoy the advantage of low processing costs and obtain inventory gains. (Finish)