With the sharp rise in international oil prices, domestic refined oil prices have also experienced “five consecutive increases”, and refined oil prices in most areas of the country have entered the “8 yuan era.”
After breaking through the US$110/barrel mark, international oil prices quickly approached the high of US$120/barrel, and the rapid increase exceeded market expectations.
On the afternoon of March 3, Beijing time, Brent crude oil once reached a high of $119/barrel, setting a new high since the second half of 2013; WTI crude oil futures rose to above the key level of $116/barrel, setting a new high since September 2008. The highest value since last month. Previously, international oil prices had risen by more than $7/barrel for two consecutive days.
As tensions between Russia and Ukraine continue, the market continues to worry about disruptions in the supply of major energy and metal products, and the commodity market is experiencing a wave of price increases.
Domestic refined oil prices rise
Filling up a tank of gas will cost you an extra $10
Affected by the recent continued rise in international crude oil prices, domestic refined oil prices have also experienced “five consecutive increases.”
On the afternoon of March 3, the National Development and Reform Commission announced that starting from 24:00 on March 3, domestic gasoline and diesel prices will increase by 260 yuan/ton and 255 yuan/ton respectively. Equivalent to a price increase, No. 92 gasoline will increase by 0.20 yuan per liter, and No. 0 diesel will increase by 0.22 yuan per liter.
As the price of refined oil increases, consumers’ oil costs will also increase.
Taking a family car with a fuel tank capacity of 50 liters as an example, filling up a tank of No. 92 gasoline will cost an extra 10 yuan. For a large logistics transport vehicle with a full load of 50 tons, the average fuel cost will increase by about 8.8 yuan for every 100 kilometers traveled.
With the implementation of this price adjustment, the retail price limit of domestic refined oil products has achieved “five consecutive increases” since the end of December last year, and the price of No. 92 refined oil products in most areas of the country has entered the “8 yuan era.”
List of oil price changes↓
During the “five consecutive increases” period, the domestic retail retail price limit of gasoline increased by a total of 1,265 yuan/ton, and the retail retail price limit of diesel increased by a total of 1,220 yuan/ton. Equivalent to price increases, No. 92 gasoline increased by 0.99 yuan per liter, and No. 0 diesel increased by 1.04 yuan per liter.
Wang Luqing, a refined oil analyst at Zhuochuang Information, said that in the short term, the international crude oil market has no factors that will cause oil prices to fall. OPEC+ has increased production by 400,000 barrels per day as planned, which will make it difficult to make up for the supply-side gap.
“According to the current oil price level, the next round of refined oil price adjustment is still expected to increase. However, international oil prices have risen sharply for two consecutive days. Whether there will be a technical correction is worthy of attention.” Wang Luqing said.
In terms of the domestic market, with the rapid rise in crude oil prices in the early stage, domestic gasoline and diesel prices have risen to highs, but the market performance has been relatively flat.
Wang Yanting said that the current gasoline market demand lacks strong support and the overall demand tends to be flat. While diesel terminal demand is still in the recovery stage, the overall improvement rate is limited. Domestic resource supply is relatively abundant, but lacks fundamental support from supply and demand. Downstream industry players are becoming more resistant to high-priced resources, and most of them focus on rigid-need purchases.
According to the calculation of the current refined oil price adjustment cycle, a new round of refined oil price adjustment window will open at 24:00 on March 17.
Crude oil leads commodity price surge
Although international oil prices have risen rapidly in the short term and the outside world has called on oil-producing countries to increase crude oil supply, OPEC+ still adheres to its original plan and decided to increase production by 400,000 barrels per day in April. In a post-meeting briefing, OPEC+ pointed out that the current market fluctuations are not caused by changes in supply and demand fundamentals, but changes in the geopolitical situation are an important reason.
On March 1, the International Energy Agency said that its member countries agreed to release 60 million barrels of oil reserves to ensure the stability of the global crude oil market. However, judging from the performance of oil prices, the market did not buy it. Relative to the current growth in global crude oil consumption and potential supply shortcomings, the release of 60 million barrels of reserves is obviously lower than market expectations.
From the perspective of recent crude oil supply and demand fundamentals, many countries have relaxed public health blockades, and the demand for refined oil products has been released ahead of schedule. High oil prices have brought about rising refining profits, and crude oil demand continues to grow. From the supply side, many OPEC+ oil-producing countries have actually Production capacity is limited, resulting in actual increase in production being lower than expected.
In addition, low oil prices in recent years and the wave of energy transformation in various countries have led international oil giants to reduce investment in fossil energy. The insufficient construction of oil and gas infrastructure has made it difficult to quickly restore supply capacity and make up for the rapid rebound in demand.
As of the afternoon closing of March 3, Shanghai crude oil futures closed at the daily limit of 719.9 yuan/ton, low-sulfur fuel oil rose by more than 9%, fuel oil and PTA rose by nearly 7%; most basic metals in the domestic commodity futures market also rose. In the international market, Lun aluminum once rose by more than 3,680 US dollars / ton, continuing to reach the highest level in history; Lun nickel prices once rose by more than 27,800 US dollars / ton, continuing to reach new historical highs.
The Wind Oil and Gas Index (886002.WI) rose 3.45% to 2398.86 points, with many oil and gas-related stocks ushering in gains.�. In the Hong Kong stock market, PetroChina (00857.HK) rose 1.18% to HK$4.3 per share, setting a new high since April 2019. China National Offshore Oil Corporation (00883.HK) rose 2.7% to HK$10.64 per share, setting a new high since February 2020.
High oil prices will gradually be transmitted downstream
Industry analysts pointed out that excessively high oil prices may increase economic operating costs and lead to an increase in global inflation. As a key chemical raw material, the rise in the price of crude oil will bring about an increase in the costs of multiple industries, and will gradually be transmitted downstream through the industrial chain.
Dong Xiucheng, an energy economist and professor at the National Institute of Opening-up at the University of International Business and Economics, told a reporter from the 21st Century Business Herald that rising oil prices are good for upstream oil and gas exploration companies, and oil companies that integrate upstream and downstream are relatively less affected. , for refining and chemical companies that purchase large amounts of crude oil, a substantial increase in procurement costs will be inevitable.
Dong Xiucheng said that the stability of international oil prices within a relatively reasonable price range will have a positive effect on both oil resource countries and consumer countries, while high oil prices will have a negative impact on the global economy, leading to an increase in economic operating costs and driving inflation. Intensification; for some countries that have not yet fully realized economic recovery, slowing economic growth coupled with inflation will lead to stagflation.
“Since various energy sources around the world are complementary to varying degrees, the significant increase in international oil prices will also promote the rapid development of renewable energy in various countries and accelerate energy transformation.” Dong Xiucheng said.
Crude oil is a very long industrial chain from extraction to transportation to processing and production. When oil prices rise and feed back to downstream industries, there is usually a delay of one to two months.
Wang Yanting, senior analyst of refined oil products at Jinlianchuang, told a reporter from the 21st Century Business Herald that domestic refineries are still using the relatively low-price crude oil purchased previously. If oil prices remain high, it will bring significant cost increases to the company. The rise in oil prices has a direct impact on market sentiment. If the domestic refined oil market still does not improve significantly during the off-season, the operating pressure on related companies will also increase.
In addition to changes in the refined oil market, since crude oil is a raw material for chemical, textile and other industries, rising oil prices will drive up the cost of raw materials in many industries, and will be transmitted to the consumer through the industrial chain.
As of March 1, the Baltic Crude Oil Freight Index (BDTI) reached 1,449, a 100% surge from two weeks ago. Jin Lianchuang’s analysis pointed out that the increase in freight rates coupled with the surge in oil prices will significantly increase the cost of imported crude oil for various countries.
For oil-producing countries, rising oil prices directly mean an increase in foreign exchange earnings. But for major oil import and consumption countries, the rising cost of crude oil is a helpless reality that needs to be faced.
What deserves attention is how long will the current high oil prices last? Different durations will have completely different impacts on the market.
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