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What does the rise in crude oil prices have to do with it?
In the first half of the year, affected by environmental protection and related industry policies, diesel demand was not optimistic. In late July, affected by the high temperature weather in the north and rainy typhoon weather in the south, the increase of diesel price was limited to some extent. Due to the high cost of raw materials and the joint support of some policies, the increase of diesel price was higher than the historical level.

Figure 1, 20 16-20 18 diesel wholesale price trend chart.

Source: Longzhong Information

According to the data analysis of Longzhong, in the first half of 20 18, the domestic main diesel price showed a trend of first restraining and then rising. The half-year average price of 20 18 diesel oil is 6523 yuan/ton, which is 995 yuan/ton higher than that of 20 17, or 18%. The main reason for the increase is the surge of 20 18 crude oil, which once broke through the $70 mark. At the end of June, 20 18, WTI rose to $ 74. 15, while at the end of June, 20 17, it was only $44.74, an increase of up to $30, which led to the increase of processing costs and prices of refineries along the way.

The state has issued a three-year action plan to "defend the blue sky", some non-compliant diesel resources have been suppressed, and the price of gasoline and diesel may remain high.

Is the high domestic diesel price driven by demand or is it valuable without market? Let's take a look at the needs of various provinces and cities:

Figure 2. Proportion of domestic diesel consumption demand

Unit: Yuan/ton

Source: Longzhong Information

As can be seen from Figure 2 above, the proportion of domestic diesel consumption demand shows that in 20 17 years, there will be 12 provinces and cities with the total consumption of refined oil above120,000 tons. Of the ten provinces and cities with diesel consumption of more than 5 million tons, six are located in coastal areas, four in East China: Shandong, Jiangsu, Shanghai, Zhejiang, and then.

Figure 3. Proportion of domestic diesel consumption demand

Source: Longzhong Information

As shown in Figure 3 above, the demand of domestic provinces and cities is uneven. The planned amount of Qingdao's main business this month has been completely completed, and the oil production of Taian CNPC has been affected by the oil depot rectification, and the completion rate is less than 30%. There is still a gap in the planned completion rate of Jiangsu Sinopec, which is about 70%-90%. Jiangsu PetroChina has cut its tasks, while southern Jiangsu has overfulfilled them, while northern Jiangsu is still losing money. The overall tasks of major provincial companies in Zhejiang have basically been tied. The completion progress of the main month plan is different. So is there a considerable profit in diesel retail?

Figure 4, Diesel Retail Profit Trend Chart

Unit: Yuan/ton

Source: Longzhong Information

As can be seen from the diesel retail profit chart, from 2065438 to July 2008, the comprehensive profit of China gas station, the average profit of diesel retail was 136 1 yuan/ton, down 3. 16% from the previous month. During the month, the retail price was lowered, but the wholesale price rose one after another, the price difference between wholesale and retail of diesel oil narrowed, and the profit decreased.

Retail profits are declining, so is there room for arbitrage in diesel import and export profits? See Figure 4 below, Analysis of Diesel Import and Export Arbitrage:

Figure 5. Arbitrage chart of diesel oil import and export Unit: RMB/ton

Source: Longzhong Information

In July, the average loss per ton of diesel oil imported from Singapore was 13.83 yuan, which was 56.7 yuan/ton lower than that of June 20 18. The average loss of diesel oil exported from South China Port to Singapore is 287.58 yuan per ton, which is 65,438 yuan +03.5 yuan/ton higher than that of 438+08 in June 1965.

On the import side, the price of diesel in Singapore has risen, while the price of domestic diesel has risen simultaneously, and the loss of import profits has narrowed. On the export side, the wholesale price of domestic diesel increased, and the price of Singapore diesel increased simultaneously, which increased the loss of export income.

On the whole, the problem of excess domestic resources is still outstanding, mainly manifested in the expansion of refining capacity, and the introduction of alternative energy sources such as new energy sources has led to a continuous slowdown in the growth rate of diesel demand.