Zhongxin Jingwei Client, March 17th (Xu Shiming) At 24:00 on the 17th, a new round of price adjustment windows for domestic refined oil products will open. According to agency estimates, the domestic retail price of refined oil products may be reduced by nearly 1,000 yuan / ton, the largest decline since the introduction of the new pricing mechanism in 2013.

Photo by Xin Jingwei, Xu Shiming

Crude oil price war begins

On March 6, the Organization of the Petroleum Exporting Countries (OPEC) and Russia failed to reach an agreement on the policy of limiting crude oil production after the end of March. Saudi Arabia began to deploy a price war after the production reduction agreement failed. Saudi Arabia ’s National Petroleum Corporation (Saudi Aramco) on the 7th offered unprecedented discounts to customers in Asia, Europe and the United States on the crude oil delivered in April. Crude oil prices were reduced by 6 to 8 US dollars per barrel. At the same time, Saudi Arabia plans to increase the daily oil output to over 10 million barrels next month. Saudi officials say that Saudi Arabia may even increase its daily output to a record 12 million barrels if necessary.

On March 9, international oil prices plummeted! As of the close of the day, light crude oil futures for delivery on the New York Mercantile Exchange closed at 31.13 US dollars per barrel, a decrease of 24.59%. London Brent crude for May delivery closed at $ 34.36 per barrel, a decline of 24.10%.

The world's largest oil company, Saudi Aramco, issued a notice on the morning of the 11th local time, and will soon increase the company's maximum continuous production level of crude oil from 12 million barrels per day to 13 million barrels per day.

In addition, according to incomplete statistics, at least six countries, including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, and Nigeria, announced their respective price adjustment or production increase plans.

On the evening of the 12th, Beijing time, it was reported that the OPEC technical meeting originally scheduled to be held on March 18 was cancelled, which also meant that between OPEC and non-OPEC countries, the last negotiation opportunity before the large-scale increase in April was missed.

As of the close of March 14, Beijing time, the US and US oils were close to the $ 30 mark. The price of light crude oil futures for delivery on the New York Mercantile Exchange closed at $ 31.73 per barrel in May; the price of London Brent crude for May delivery closed at $ 33.85 per barrel.

Domestic oil prices may be reduced by nearly 1,000 yuan / ton

Will the sharp drop in international oil prices drive this round of domestic refined oil prices?

Zhang Chuangyi, a product oil analyst at Zhuochuang Information, pointed out that during the current round of pricing cycles, OPEC and Russia had a "black swan" incident in negotiations on a reduction agreement. Subsequently, Saudi Arabia, Russia and other countries increased production to varying degrees, causing crude oil prices to fall significantly. In addition, global public health events continue to ferment, curbing demand for crude oil, and under multiple negative conditions, crude oil prices continue to bottom out.

According to the calculation of Zhuochuang Information, as of the close of March 13, the change rate of reference crude oil on the ninth working day in China was -24.12%, corresponding to a decrease of 940 yuan / ton for gasoline and diesel. This translates into price increases, with 92 # gasoline falling by 0.74 yuan / liter and 0 # diesel by 0.8 yuan / liter. If you adjust according to this, private car owners will spend 37 yuan less to fill a box of (50L) 92 # gasoline.

According to the "Measures for the Administration of Petroleum Prices" issued by the National Development and Reform Commission on January 13, 2016: "When the price of crude oil on the international market is lower than $ 40 per barrel (inclusive), the refined oil is calculated at the crude oil price of $ 40 per barrel and the normal processing profit margin. Price. "$ 40 per barrel is the so-called" floor price. "

Zhang Jinyi said that in terms of the current crude oil price level, Zhuo Chuang's estimated crude oil average level is still above the "floor price" of $ 40 / barrel, which is in line with the conditions of the domestic refined oil pricing mechanism for price adjustment. At 24:00 on the 17th, the domestic retail price of refined oil products may be reduced as scheduled, and it is the largest decline since the introduction of the new pricing mechanism in 2013.

It is worth noting that since this year, domestic refined oil prices have undergone four rounds of adjustment, showing a pattern of "two reductions and two strandings." The price of gasoline has been reduced by RMB 835 / ton, and the price of diesel has been reduced by RMB 805 / ton.

"Floor price" or restart

On March 11, Zhang Chao, deputy director of the International Division of the National Development and Reform Commission's Price Monitoring Center, pointed out that if Saudi Arabia and Russia expand production at current capacity, coupled with the current sluggish demand for crude oil, crude oil supply in the second quarter will face a serious surplus. . If this oversupply situation continues, then the low price range will also continue.

For the market outlook, Bi Haibing, an oil product analyst at Jinlianchuang, believes that although the domestic production and living order has continued to recover, the global epidemic situation has shown an explosive trend in many countries. In addition, Saudi Arabia and Russia are expected to increase production in April. The supply and demand face bearish constraints, and international crude oil futures prices may remain volatile and do not rule out further exploration. As crude oil continues to fall, the average price of integrated crude oil will fall below the "floor price" of $ 40 per barrel.

Zhongyu Information believes that ultra-low oil prices may continue until mid-late April, but the narrowing of the forward premium may mean a short-term rebound in the short term.

The next round of retail price adjustment window for refined oil products will open at 24:00 on March 31. "After entering the next round of pricing cycle, the opening of the 'floor price' will be a high probability event." Bi Haibing said.

Zhuochuang Information also believes that the international crude oil market still has the risk of continuing to fall, and it does not rule out that the next round of "floor prices" may restart after an interval of four years. (Zhongxin Jingwei APP)

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