With only two days remaining until the domestic refined oil price adjustment window opens at 24:00 on June 4th, the market is poised for a substantial reduction. Data for 70% of the current pricing cycle has been compiled, and following a sharp decline in international crude oil prices last Friday, the projected price cut has been fully realized. Current estimates indicate a reduction of approximately 0.4 yuan per liter for gasoline, solidifying the expectation of a major price drop this cycle. Car owners can anticipate the second domestic fuel price decrease of the year by Thursday evening.
The primary driver behind this trend is a shift in market sentiment, fueled by optimistic expectations of easing tensions in the Middle East. This has led to a significant unwinding of the geopolitical risk premium previously baked into oil prices, resulting in last week's steep international market decline. The main U.S. crude oil futures contract fell by a cumulative 9.57%, while Brent crude experienced an even steeper drop of over 11%.
Reviewing the domestic price adjustments so far this year, a total of 25 scheduled adjustments were planned. Of the 10 cycles already completed, the pattern has been one dominated by increases, with 8 hikes, 1 decrease, and 1 cycle where prices remained unchanged. As the current adjustment period draws to a close with only three statistical days left, the projected reduction continues to climb.
Based on statistics from the first six working days, the forecast is for a price cut of 510 yuan per ton. Translated into retail prices, this equates to a reduction between 0.39 and 0.46 yuan per liter for both gasoline and diesel. When the new prices take effect on June 4th, the market is expected to witness its second notable fuel price drop of the year. This adjustment could see the price of 95-octane gasoline fall below the 9-yuan mark, while 0-grade diesel may also drop below 8 yuan per liter.
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