Affected by the new epidemic situation, the global economy will be hit hard in 2020, the performance of international crude oil market will be ups and downs, the breakdown of OPEC + negotiations, ultra scale production reduction, “negative oil price”, and the farce ridden US election will come in droves. In 2020, the domestic oil product market will first be restricted by local traffic and production, resulting in low demand for oil products; then, the crude oil price will not be adjusted when it is below the floor price of $40 / barrel, and the oil product price will run at a low level after falling in 2020. According to the price comparison chart of the business community in the past three years of 2018, 2019 and 2020, in 2020, the price of refined oil market fell sharply at the beginning of the year, then continued to run at a low level, and the later fluctuation was far less than that in 2018 and 2019.
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Let’s first review the trend of oil products market in 2020
Trend chart of average distribution price of domestic 92% gasoline
Trend chart of domestic 0 ᦇ diesel distribution average price
On the whole, according to the data of business news agency, as of December 31, 2020, the price of gasoline is 5697 yuan / ton, with an annual decrease of 14.21%, while the price of diesel is 4835 yuan / ton, with an annual decrease of 23.96%.
In January, with the blessing of new year’s day and Spring Festival, the domestic oil product market needs to have expectation and guarantee, and the domestic oil product market price remains stable. At the end of January, Wuhan city was closed, domestic transportation and production were restricted, and international oil prices quickly entered the downward channel. The domestic oil product market was frequently bad, and the oil product rapidly declined. By the end of February and the beginning of March, China’s epidemic situation was under control, and all parts of the country actively returned to work and production. However, the negotiation of OPEC + production reduction agreement broke down, Russia and Saudi Arabia fought a price war, and Saudi Arabia announced a large-scale production increase to gain more market share. The two sides wrestled with each other to return to the negotiation table, and the oil price plummeted. 4. In May, the domestic market returned to normal and the demand for refined oil was guaranteed, but the new epidemic spread abroad. The international crude oil price continued to be lower than the floor price of US $40 / barrel, and the domestic refined oil price remained unchanged. On May 7, 2020, the lowest price of gasoline appeared in the year, with the price of 4576 yuan / ton; at this time, the market price of diesel also fell to the low point of 4800 yuan / ton.
Since the second half of the year, although the epidemic is still fermenting, the economy has continued to recover, and the oil price has entered a relatively stable stage. In July, OPEC + extended a month’s super scale production reduction (9.7 million barrels), and the production reduction scale has dropped to 7.7 million barrels / day since August. From July to October, oil prices have been rising and falling, mainly in the range of shocks. During this period, the domestic oil product market price rebounded gradually, but the overall rebound rate of the oil product market price was not large (gasoline price increased by 4.5% from June to October; diesel price continued to fall by 8.4%), and there was no other good news stimulation, so the domestic oil product price was not hot and low from June to October.
After November, the new crown vaccine made a major breakthrough. In addition, OPEC + reached an agreement to reduce production in early December, which also sent a positive signal to the oil market, opening an upward channel for international oil prices. The price adjustment of domestic oil products ushered in “four consecutive rises”, driving the price of domestic oil products up. From November to December, gasoline prices rose by 10.08%, and diesel prices rose by 6.12%.
The monthly rise and fall of gasoline and diesel are as follows:
Prospects for 2021
Crude oil demand continues to recover in 2021
The epidemic situation in 2020 has always existed. At present, the world economy in 2021 may still be shrouded in the shadow of the epidemic situation. Although the vaccine has made a major breakthrough and entered the vaccination process, there are still many variables in the current epidemic situation. For example, the number of infected people is still increasing, Europe and the United States are still implementing restrictive measures, and the virus variants also bring new challenges to the vaccine. The most important factor of oil price around 2021 is still demand. Recently, OPEC has lowered its oil demand forecast for 2021 again. Due to the continuous impact of the new epidemic, the rebound speed of global oil demand in 2021 will be slower than previously expected. Its latest monthly report shows that the demand will increase by 5.9 million barrels / day to 95.89 million barrels / day next year. This growth is expected to be 350000 B / D lower than a month ago. The recovery of demand has a long way to go.
Refined oil prices will rebound in 2021
In 2020, the domestic oil product market demand will basically return to normal, and the fluctuation of oil product market price is mainly affected by the international crude oil price. With the development of vaccines in various countries, the world economy will gradually recover in 2021, the demand of international crude oil market will continue to improve, or will return to the pre epidemic level, and the rebound of international crude oil price will continue to benefit the domestic refined oil market. At the same time, with the large domestic refining and chemical enterprises gradually put into production, the problem of domestic oil product oversupply will gradually become prominent. Therefore, in 2021, the domestic oil product market will continue to rebound with the rise of crude oil price, but it will not be able to rise to the level before the epidemic.
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