In this cycle (since January 31), tensions in Ukraine have pushed up the risk premium level of oil prices, and international oil prices have hit a new high since September 2014. At 24:00 on February 17, the domestic refined oil price or another upward adjustment, it is expected that the price of gasoline and diesel will be raised by about 200 yuan per ton, equivalent to 92 # gasoline, 0 # diesel per liter of about 0.16 yuan, 0.17 yuan respectively.
The intensification of geopolitical risks is an important reason why international oil prices have once again refreshed their new highs in more than 7 years. Tensions in Russia and Ukraine have fueled concerns about a reduction or disruption in Russia's energy supply. Tight supply in oil market fundamentals is a longer-term factor supporting oil prices. Against the backdrop of the slowdown in the impact of the epidemic on oil demand, oil supply growth has not kept pace, global oil inventories have been explored, and even in the off-season demand in the first quarter has not been effectively replenished, which has made oil prices difficult to keep up.
The International Energy Agency (IEA) said in its latest monthly report that OPEC+ continued to perform poorly in meeting production targets, which has slowed the pace of supply growth. Global oil inventories have been at a multi-year low, while OPEC+ remaining capacity continues to decline, making the oil market lack of buffers.
According to OPEC's monthly report released in February, in January, OPEC's average daily production increased by only 64,000 barrels month-on-month, and the decline in production in Venezuela and Libya dragged down the organization's overall production growth. At the same time, judging from the recent output performance, Saudi Arabia has no willingness to make up for the difficulties of some OPEC members in increasing production.
Efforts by OECD countries to launch strategic petroleum reserves over the past year have failed to stem the downward trend in commercial oil inventories, IEA data shows. In December 2021, OECD commercial oil inventories fell sharply by 60 million barrels to 2.680 billion barrels, 255 million barrels below the five-year average and the lowest level in nearly seven years.
Driven by tight fundamentals and intensified geopolitical risks, on February 14, 2022, the prices of the main crude oil futures contracts of Brent and WTI both broke through the $95 / barrel mark. In this pricing cycle, the rate of change of the package of crude oil continues to run in a positive direction, and the positive amplitude has been significantly enlarged in recent days. Data released by the Xinhua News Agency's oil price system on February 16 showed that the average price change rate of the package of crude oil on February 15 was 4.45%. According to this calculation, it is expected that at 24:00 on February 17, the price of domestic gasoline and diesel will be raised by about 200 yuan per ton.
Figure: The average price change rate of a package of crude oil released by the Xinhua News Agency Oil Price System since the beginning of the cycle
Source: China Natural Gas Information Terminal (E-Gas System)
Since the beginning of this year, the domestic retail price limit of refined oil products has experienced 2 price adjustment windows, 2 times are raised, and the cumulative price of domestic gasoline and diesel has increased by 655 yuan and 630 yuan per ton respectively.
Wholesale market, the rise in international oil prices continues to have a certain boost to the domestic market, from the demand side, after the holiday gasoline replenishment demand, diesel demand has not been started, refined oil wholesale market as a whole rose, of which gasoline rose more obviously. According to the wholesale prices of China's gasoline and diesel jointly released by China Economic Information Service, China Petroleum Economic and Technical Research Institute and Shanghai Petroleum and Natural Gas Trading Center, on February 15, the average wholesale prices of 92# gasoline and diesel (including low freezing point) in the country were 9449 yuan / ton and 7884 yuan / ton, respectively, up 152 yuan / ton and 18 yuan / ton compared with February 7 (the first working day after the Spring Festival holiday).
Looking forward to the future, there is still great uncertainty in geopolitical risk factors, but the tight fundamentals support oil prices are relatively strong, and it is expected that international oil prices will continue to fluctuate at a high level.