On 14 october, the international crude oil market experienced the darkest day in two years: as at that date, the prices of light crude oil futures delivered by the new york commodity exchange in november 2014 had fallen by $3. 9 per cent, or 4. 55 per cent, representing the largest daily fall since november 2012 at $81. 84 per barrel and the lowest closing price since june 2012. The price of the london brent crude oil futures delivered in november 2014 fell by $3. 85, to 4. 33 per cent, the largest daily decline since 2011, at $85. 04 per barrel. Yesterday, the prices of light crude oil futures in new york fell by $80。
The continued sharp decline in international crude oil prices has led to a steady decline in domestic prices for finished oil. According to institutional estimates, the decline in the new round of finished oil is expected to be around $300 per ton, which will bring multiple oil prices back to the six-dollar era。
In this context, how would the “three-barrel oils” of medium oil, medium petrochemicals and mid-sea oil be affected
Multi-terrestrial oil prices will return to the six dollars era
Since june, international oil prices have continued their downward trend for nearly four months, with both wti and brent falling by more than 20 per cent, and in september oil prices by more than 10 per cent compared to the same period last year。
Recently, after 13 days of international crude oil falling to its lowest prices in two years, 14 days of crude oil recovery fell sharply, with the wti falling by $3. 9 to $81. 84 per barrel and brent falling by $3. 85 per barrel to $85. 04 per barrel, owing, inter alia, to the imbalance in supply and demand in the crude oil market as a result of the abundant supply and the global economic slowdown。
The current price of domestic finished oil has changed in the light of the rise and fall in international crude oil, and the continued decline in international oil prices has led to a continued decline in domestic finished oil prices. As a result of the sharp fall in international oil prices, the price adjustment rate of crude oil for domestic finished products was negative at 14 days, stretching to 5. 04 per cent. Although two working days remained before the price adjustment for finished oils, the short-term decline in crude oil was difficult to halt and the price of finished oils fell by almost six consecutive days. The agencies forecast a reduction of around $300 per ton in the current round, which will refresh the maximum decline during the year。
Taken together, the cumulative six drops would be $1,100 per ton, resulting in the combined conversion of $0. 86 per litre of petrol, 0. 74 per l of diesel fuel and a return to the six-dollar era of petrol prices in the multi-principal area。
According to suh lizin, china’s information analyst, the fall in the price of finished oil is bound to reduce costs for the logistics enterprise, the taxi industry and private car owners, whose main source of production is oil; but for the refinery, it is cloudy。
The upper-middle is more affected
Multiple analyses suggest that oil prices continue to decline, with mid-industry refineries being the most affected。
She argues that since the commission's shorter pricing cycle, market speculation and hoarding have largely disappeared, and that middlemen are mostly cautious about keeping pace, maintaining fast-track strategies and local refineries maintaining low-load operations to digest their own stocks. The overall weakness of market demand, combined with declining prices for the sale of finished oils and the erosion of the low price advantage of local refineries, has led to a reduction in market share, and individual refineries have even been able to absorb stocks at below-cost prices。
According to china's information monitoring data, a large number of refineries are currently in a deficit, whether they are refining oil using winning crude oil or processing direct fuel. Suh xu, an analyst of the rwandese petrochemical network, told journalists of the daily economic news that, owing to poor market conditions, many of the overhauled refineries had been delayed。
Under the influence of empty market attitudes, the price of diesel refined in shandong may be high. “in the long run, the roads of mountain refining have been particularly difficult, with many factors, such as oil upgrades and abundant market supplies, and the adjustment of the marketing strategies of refineries to overcome the difficulties has become a top priority.” xu lijun said。
In addition to midstream refineries, the fall in oil prices has had a significant upstream impact on the oil chain. According to lim boqiang, director of the china energy economy research centre at xiamen university, “production costs will not be reduced in a short period of time, but the prices of crude oil sold abroad are declining and upstream producers are hit most intuitively”
It's good for the end sales
In this case, the “three-barrel oil” would inevitably be hit。
According to zhang bin, the refinery's reserves are now generally between one and three months old, and the raw materials are now refined at least one month ago, when the price of crude oil is above $90, and further downwards in the price of finished oil will undoubtedly have an impact on the profits of the producing firms; as the operations of the three-barrel oil mains differ, the operational aspects of the shock will not be the same。
In the area of crude oil production, limbergh believes that medium oil is also more affected by its largest domestic share, while medium-sea oil may also be affected by the concentration of its main operations in upstream exploration。
Chen wing told the daily economic news reporter that, in refining, the refining capacity of chinese oil and chinese petrochemicals accounted for about 70 per cent of the domestic refining market, so that the profits from the two-barrel refining operation would also be reduced in the larger environment。
“the wholesale stages of chinese petrochemicalization, chinese oil, and chinese oil are weak, with successive oil price setbacks and few profit margins.” sang-hyun, china information analyst, told the journalists。
An unnamed analyst stated that while the continued decline in oil prices would lead to a decline in the profits of the “three barrels”, the exact value was not easy to measure because of the multiple prices of the oil from crude oil to middleman to final sale, which made it difficult to determine price levels externally。
Although the decline in the price of finished oil is intuitively reflected in the downward trend in the price of oil at the gas station, the industry believes that the profits from the final sale will not be affected. For limbergh, the declining oil prices are good for downstream firms, “it is easier to buy low prices than high prices for petrol stations”。
Sang-hyun also believes that the middle oil, medium petrochemical retail chain can improve to some extent the low profits of the wholesale chain。
However, a limited number of gas stations will still be hit at the end of the sale. According to the “hide of low oil prices”, published yesterday by the china sea oil network, the oil sales company is very sensitive to oil price rises and falls. Declines in oil prices and market downturns have led to pressures such as “sales that are difficult to open; stock increases that push up the company's operating costs; losses that run upside down sales prices; and pressure on companies to make profits”。
Responsible editor: zhang dei
