Following a recent decline in international crude oil prices, a new round of reductions in domestic refined oil retail prices has been implemented as anticipated.
The National Development and Reform Commission (NDRC) announced that since the last price adjustment on May 21st, international crude oil prices have fluctuated downwards before a recent slight recovery. The average price over the 10 working days preceding this adjustment was lower than the average over the 10 working days before the last adjustment.
In response to changes in international oil prices, starting from 00:00 on June 5th, the prices for domestic gasoline and diesel (standard products) have been lowered by 525 yuan and 505 yuan per ton, respectively. This marks the second retail price decrease for domestic refined oil products this year.
According to calculations by Zhuo Chuang Information, this translates to reductions of 0.41 yuan per liter for 92-octane gasoline, 0.44 yuan per liter for 95-octane gasoline, and 0.43 yuan per liter for 0-grade diesel.
Consequently, after this price adjustment takes effect, filling a 50-liter tank with 92-octane gasoline will cost 20.5 yuan less than before.
So far this year, domestic refined oil retail prices have undergone eleven adjustment windows, resulting in a pattern of eight increases, two decreases, and one suspension of adjustment. After offsetting the increases and decreases, the prices for domestic gasoline and diesel (standard products) per ton are still 2,055 yuan and 1,980 yuan higher, respectively, compared to the end of last year.
Examining the current adjustment cycle, international crude oil prices fell after fluctuating at high levels, leading to a deepening negative crude oil change rate. Although oil prices rose slightly towards the end of the adjustment period, the negative change rate saw limited narrowing.
Regarding recent international oil price movements, an official from the NDRC Price Monitoring Center stated that early in this cycle, expectations of a de-escalation in geopolitical conflicts drove Brent crude futures down to around $92 per barrel. However, entering June, renewed escalation of conflicts led to a rebound in international oil prices.
Furthermore, significant reductions in crude supply from Gulf countries and global inventories dropping to low levels are expected to continue supporting international oil prices. The International Energy Agency (IEA) noted that supply from Gulf nations has decreased by 14 million barrels per day since late February, accounting for approximately 15% of global daily consumption. Goldman Sachs estimates that global total crude inventories fell to a level equivalent to 98 days of demand by the end of May, breaching the industry's "100-day warning line."
From the perspective of the domestic market, an energy analyst from JLC Energy, Xu Peng, indicated that during this pricing cycle, the fluctuating decline in international crude oil prices, coupled with the persistent expectation of a retail price cut, has dampened the domestic crude market.
Simultaneously, refined oil product consumption remains weak. For gasoline, the continuous growth in new energy vehicle sales, combined with the still relatively high retail prices for refined oil, has slowed the drawdown of gasoline inventories. For diesel, despite some increase in agricultural stockpiling demand, overall weak consumption has prevented a significant improvement in market purchasing enthusiasm.
The NDRC Price Monitoring Center anticipates that short-term fluctuations in international oil prices will intensify, warranting close attention to subsequent developments.
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