International oil prices plummet to dilemma in domestic refined oil market

In the past week, international crude oil prices have continued to fall. As of Friday, WTI has fallen to 73.46 US dollars/barrel, which has brought about no small impact on the domestic refined oil market. Local shipments have all been moderated. Reflected in the price segment, its trend has not been synchronized with the decline in the trend of crude oil, but it has continued to maintain its current high level. Only the transaction prices in some areas with sufficient resources have declined slightly.
According to the latest statistics, in July, the output of various major refined products in China continued to grow year-on-year, but the growth rate declined slightly. Among them, diesel production increased by 4.0% from the same period last year to 13.45 million tons; gasoline production increased by 0.9% year-on-year to 637. About tons. From a digital perspective, the increase in production will increase the supply of refined oil in the domestic market. Under the dual influence of abundant market resources and the fall in international oil prices, the domestic refined oil price should reasonably fall back.

However, judging from the current performance, since July, heavy rains and unexpected events in most parts of the country have brought a big impact on the supply of domestic refined oil products. The phenomenon of control sales and even suspension of sales occurred repeatedly. Recently, frequent mudslides in the southwestern region and floods in the northeastern region will further affect the availability of resources in related areas. The situation of resource shortages in the later period may be aggravated, and there may be no sign of a significant reduction in market prices.

From the analysis of the production process, with the construction of the 10 million-ton oil refining project of CNPC Jilin Petrochemical entering the final sprint stage, this year China may add 30 million tons of crude oil refining capacity. With the significant increase in refining capacity, the industry is concerned about the excess domestic production of gasoline and diesel during the latter period.

According to arrangements, Jilin Petrochemical's 10 million-ton refinery expansion and expansion project is expected to be put into operation by the end of October this year, directly reaching the level of 10 million tons of oil refining. In addition, by the end of the year, Sinopec Luoyang Petrochemical and PetroChina Liaoyang Petrochemical will each increase their crude oil processing capacity by 2 million tons and 4.5 million tons respectively, plus two other super refineries: Sinopec Tianjin Petrochemical and Sinopec Guangxi Petrochemical Qinzhou Project. Once put into production, China's crude oil processing capacity will increase by 30 million tons at a time. The theoretical estimate is that the surplus of refined oil resources will be 15 million tons.

According to statistics, at present, domestic sales of refined oil products are estimated to be more than 200 million tons. From the perspective of surplus, the theoretical surplus of 15 million tons is not large. Moreover, due to the continued high prices of domestic refined oil products, smuggled oil products in South China have become increasingly fierce, and they have largely seized the momentum of the main sales share. In the latter stage, the domestic oil refining industry should make further reasonable plans to resolve the current market chaos.