A new window for adjusting domestic refined oil product prices is set to open at 24:00 on April 7. Industry analysts predict a high probability of a price increase in this round.
Following the previous price adjustment on March 23, the National Development and Reform Commission stated that since the last adjustment on March 9, international crude oil prices had surged significantly due to escalating conflicts, with Middle Eastern crude prices repeatedly hitting record highs. To mitigate the impact of abnormal international oil price increases, reduce the burden on end-users, and ensure stable economic operation and social livelihoods, temporary control measures were applied to domestic refined oil prices while maintaining the current pricing framework. After these controls, for private car owners with a 50-60 liter fuel tank, the cost of filling up with 92-grade gasoline was reduced by approximately 40-50 yuan.
A report from Longzhong Information indicates that international crude oil prices have maintained an upward trend during this pricing cycle, corresponding to an expected increase in refined oil prices. As of April 2, the average reference crude oil price for the cycle was $109.06 per barrel, an increase of 2.24% compared to the previous cycle. It is estimated that the theoretical upward adjustment for refined oil products at the opening of the price window will be around 130 yuan per ton, making a price increase highly likely in this round.
JLC Network stated that crude oil prices recently showed a pattern of rising then falling, with the weekly average price increasing compared to the previous period. Although high prices have begun to suppress some petroleum consumption, overall demand remains resilient. Global crude oil demand is expected to gradually rise to approximately 106 million barrels per day, maintaining a high level. As the decline in demand is limited, it is difficult to fully offset the impact of supply contraction, leaving the overall market in a state of tight balance or even shortage.
Longzhong Information forecasts that, according to the domestic refined oil pricing mechanism, the adjustment on April 8 will correspond to an increase of around 130 yuan per ton, marking the sixth price hike this year. If this increase materializes, a private car owner filling a 70-liter tank would spend about 6.7 yuan more.
It has been noted that domestic fuel prices have undergone six adjustments so far this year, resulting in "five increases and one pause." The prices of gasoline and diesel per ton have risen by 2,320 yuan and 2,235 yuan, respectively, compared to the end of last year. If this round's adjustment increases as expected, the pattern for the year will change to "six increases and one pause."
According to the "ten working days" principle, the next retail price adjustment window for refined oil products will open at 24:00 on April 21.
Looking ahead, a Longzhong Information report suggests that the United States has indicated it will not be entangled with Iran for long, and the intensity of future conflicts is expected to decrease. Multinational negotiations are also underway regarding navigation issues in the Strait of Hormuz. Combined with the recent high volatility in international oil prices, the probability of a price decrease in the next refined oil product adjustment is relatively high.
JLC Network believes that regarding a ceasefire, the diplomatic signals released by the US and Iran are ambiguous, so uncertainties surrounding the Middle East geopolitical situation and shipping remain. If the US ends the conflict with Iran quickly, oil prices will decline faster; otherwise, they may continue to rise.
A report from SCI International stated that the core disagreements between the US and Iran are currently difficult to reconcile, the military situation is deadlocked, navigation efficiency in the Strait of Hormuz remains low, and there are no clear signals of easing geopolitical risks. Against this backdrop, international oil prices may maintain wide fluctuations at high levels, with a need to remain vigilant for extreme price volatility caused by an unexpectedly significant escalation of the conflict. Entering May and June, geopolitical events may gradually subside, market risk aversion may cool, and crude oil prices are expected to gradually retreat from high ranges. It is forecast that the average monthly price of U.S. crude oil over the next three months will be $94.69, $86.37, and $72.51 per barrel, respectively, showing an overall pattern of stepwise decline.
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