The supply of refined oil exceeds the demand, and the market price continues to decline in the middle and late June

With the increase of rainfall, the demand of terminal market is not enough to boost, and the operating rate of refineries remains high, and the supply of refined oil is sufficient. The domestic gasoline and diesel prices continue to decline in the middle and late June. According to the monitoring data of the business agency, domestic gasoline and diesel prices fell by 3.96% and 5.29% respectively in the middle and late June.



On the demand side, the demand for gasoline was not good enough. For gasoline, rainstorm weather occurred in some parts of the south, and there were signs of flooding. The northern region also had frequent rainfall, and the demand for gasoline was reduced due to the impact of rainfall. In terms of diesel, the traditional rigid demand industries such as engineering, infrastructure construction and mining still support the market. However, rainstorms in the South and domestic epidemic situation occurred in a small range, and the activity of logistics and transportation industry declined, so the demand for diesel oil was very weak.


In June, the operating rate of domestic refineries remained at a high level, with the operating rate of main refineries rising to about 71%, and that of Shandong local refineries rising to 76%. The domestic gasoline and diesel supply was sufficient. In April, the apparent consumption of refined oil was 27.74 million tons, with a year-on-year increase of 2.1%, including a year-on-year increase of 4.53% for gasoline and 13.4% for diesel.


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In late June, the “floor price” of US $40 / barrel rose, and three months later, the domestic refined oil ushered in an upward adjustment. At 24:00 on June 28, the highest retail prices of domestic gasoline and diesel were increased by 120 yuan / ton and 110 yuan / ton respectively. However, the international oil price fell for consecutive days at the end of the month, and the WTI crude oil futures price fell below 38 US dollars / barrel. The benefits brought by the price adjustment of refined oil were offset, and the wait-and-see sentiment in the downstream market was revived.


Lu Xingjun, an oil product analyst at the business club, believes that: at present, OPEC + production reduction continues to support the bottom oil price, but the foreign new crown epidemic situation is still relatively serious, the international oil price will remain at about $40 / barrel, and the domestic oil product supply is sufficient, it is expected that the domestic oil product price will continue to decline under pressure in the short term.