Domestic refined oil prices or meet the "three consecutive falls", can No. 95 gasoline return to the "8 yuan era"?

The owners who want to refuel wait for it, and the domestic oil price will soon be adjusted again
.

At 24:00 on July 26, a new round of price adjustment window for domestic refined oil products will soon open
.
Since the current pricing cycle, the market crude oil supply prospects are still uncertain, coupled with the arrival of the peak summer demand, the international oil market supply is expected to tighten, and the price of refined oil products in the new round of price adjustment cycle may continue to decline
.

According to Zhuo Chuang information estimates, as of the eighth working day of July 22, the average price of reference crude oil varieties was 100.
10 US dollars, the rate of change was -5.
52%, and it is expected that domestic gasoline and diesel will be reduced by about 330 yuan / ton, equivalent to a range of
0.
25 yuan / liter -0.
29 yuan / liter.
This means that domestic refined oil prices may usher in "three consecutive declines"
.

According to this adjustment calculation, the owner can save more than
12.
5 yuan by filling a 50-liter fuel tank.

This round of refined oil price adjustment is the fourteenth price
adjustment this year.
Since the beginning of this year, the price adjustment of refined oil products has shown a pattern
of "ten rises and three falls".
After the rise and fall offset, gasoline and diesel rose by 2040 yuan / ton, 1965 yuan / ton, respectively, compared with the beginning of the year, to fill a 50-liter tank to pay 85 yuan
more.

Image source: Figureworm Creative

Some areas are expected to return to the "8 yuan era"

The car is an important means of travel in people's daily life, and the consumption of fuel is also an important expense
of car owners.

According to statistics from the Ministry of Public Security, as of the end of June 2022, the number of motor vehicles in the country reached 406 million, of which 310 million were cars
.
This means that every oil price fluctuation affects the hearts of hundreds of millions of car owners, who are afraid that they have not had time to refuel before rising, and they are worried that they will "reverse the extreme"
.

After the last round of price adjustment, in addition to the high-priced markets in Tibet and Hainan, the national No.
92 gasoline returned to the "8 yuan era", and the average price dropped to the range of 8.
77 yuan / liter; No.
95 gasoline, also from the "10 yuan era" to about 9.
36 yuan / liter; The national average price of No.
0 diesel fuel fell to about
8.
47 yuan / liter.

Although cities across the country strictly implement the refined oil pricing mechanism stipulated by the National Development and Reform Commission, because the distribution of crude oil resources, refined oil transportation, and infrastructure costs in various regions are different, some of the costs will be reflected in the oil prices at the retail end, so the oil prices in various places are slightly different, even in the same province, there will be some differences in prices in
different cities.

So in which regions of the country are oil cheaper? The difference in the distribution of crude oil resources in different regions is one of the main reasons for the difference in oil prices in different
regions.
After combing through the Times Weekly reporter, it was found that the oil prices in Shaanxi and Ningxia, where the Changqing oilfield is located, and the Xinjiang region where the Karamay oilfield is located, are lower
than in other parts of the country.

Taking the retail price of refined oil products on July 22 as an example, the retail price of No.
95 gasoline in Shaanxi, Ningxia and Xinjiang was 9.
14 yuan / liter, 9.
16 yuan / liter and 9.
13 yuan / liter respectively, which were the three lowest prices in
the country.

In addition, provinces with large refineries will also have relatively lower oil prices
.
Because crude oil needs to be processed by refineries, refined into gasoline, diesel and other refined oils, and then transported by transport vehicles to terminal retail gas stations everywhere, if there are many local refineries and the distance is closer, it will reduce transportation costs, and the corresponding retail oil prices will be cheaper
.

In terms of the layout of refineries across the country, China's 10 million tons of refineries are mainly concentrated in coastal areas such as Zhenhai, Shanghai, and Dalian, while there are few
refineries in Yunnan, Guizhou, Sichuan, Guangxi and other places.
In contrast, oil prices in coastal areas are more favorable
.

There are only 2 days left before the opening of the new round of price adjustment window, if according to Zhuo Chuang information forecast, oil prices are reduced by 0.
25 yuan / liter -0.
29 yuan / liter, then the retail price of No.
95 gasoline in Shaanxi, Ningxia and Xinjiang is expected to return to the "8 yuan era"
.
In addition to the above three places, oil prices in Tianjin, Hebei and Hunan may also fluctuate
in the range of 8-9 yuan / liter.

The momentum of crude oil production increase is insufficient

As one of the world's major oil importers, 73% of China's oil comes from the international market, so domestic oil prices are generally greatly
affected by international oil prices.

Under the factors of recession fears and the strengthening of the US dollar, the international crude oil market has continued to fluctuate
in the past month.
On July 12, Brent crude oil and WTI crude oil fell below the $100 mark, and then the supply tension returned to dominate, causing oil prices to rebound, and on July 19, Brent's main contract rose above $106
.

But after a brief rally, crude oil prices fell again
.
As of the close of trading on July 23, Beijing time, the price of WTI crude oil futures in September fell 1.
71% to close at $94.
70 / barrel; Brent crude futures fell 0.
64% in September to close at $103.
2/bbl
.

Behind the frequent fluctuations in international oil prices, the key logic is that the supply and demand of the oil market are still tight
.

Since the beginning of this year, due to the multiple rounds of sanctions triggered by the Russian-Ukrainian conflict, Russia's large oil supply is difficult to enter the Western market, the market urgently needs to obtain new oil supply to fill the supply gap, coupled with OPEC (Organization of the Petroleum Exporting Countries) oil production is far below the target, the international crude oil market pattern has always had a "prisoner's dilemma"
.

In this context, high energy prices have further exacerbated domestic inflation, forcing US President Biden to start a trip to
the Middle East.
However, the high-awaited trip to the Middle East ended without success, failing to secure Saudi Arabia's commitment to
increase oil production.
Saudi Crown Prince Mohammed bin Salman told the outside world that Saudi Arabia has the ability to increase domestic crude oil production capacity to 13 million barrels per day, but there is no additional capacity to continue to increase
crude oil production.
This means that Saudi Arabia's current oil production is almost at its limit.

From the demand side, the global demand for oil is still large
.
According to OPEC's July monthly report, global crude oil demand is expected to increase by 2.
7 million b/d to 103 million b/d year-on-year in 2023, while supply outside OPEC will increase by only 1.
7 million b/d
.
This also shows that the tension in the oil market has not completely eased, and OPEC needs to increase production by 1 million barrels per day in 2023 to match supply and demand
.

In the context of this lack of momentum to increase crude oil production and imbalance between supply and demand, will oil prices rebound and rebound next? Lin Boqiang, dean of the China Energy Policy Research Institute of Xiamen University, said in an interview with the Times Weekly reporter that OPEC will hold a meeting in early August (August 3) to decide whether to increase oil production, even if it decides to further increase production, but the possibility of excess production is very small, the impact on oil prices is also very limited, and it is expected that international oil prices will still return to around
$100.

In addition, in order to curb the current high inflation in the eurozone, on July 21, the European Central Bank implemented its first interest rate hike since 2011, raising the three major interest rates by 50 basis points, the largest in 2000 years
.
In this regard, Lin Boqiang said that the interest rate hike may have an impact on oil prices in the short term, and oil prices fell on the same day, but in the long run, the guidance on prices still falls on supply and demand itself, and the decline in oil prices depends on whether demand is reduced
.