As of May 7, the
average comprehensive refining profit at Shandong independent refineries stood
at RMB 387.4/mt, up RMB 169.7/mt WoW. Over the same period, the average crude
oil price plunged by RMB 355/mt, while product revenues at Shandong independent
refineries fell by RMB 161/mt WoW.
Restocking demand was
dampened by eased crude oil prices during the May Day holiday, resulting in
dull transactions of gasoline and diesel. Although post-holiday replenishment
briefly lifted gasoline and diesel prices, the average weekly prices of both
fuels still recorded a notable month-on-month decline. As for petroleum coke, buying
interest also cooled after the holiday, driving prices lower compared to the
pre-holiday week. Combined with revenues from other by-products, the average
product revenue at Shandong independent refineries decreased WoW, though the impact
was offset by the decline in feedstock costs.
In
the upcoming week, crude oil prices are projected to rebound. Downstream users
may temporarily step up restocking in response to rising crude prices, but the
momentum is unlikely to be sustained. Hence, gasoline and diesel prices may
rise initially before softening. Factoring
in revenues from other by-products, the average product revenue is anticipated
to inch up WoW. Overall, as the growth in product revenues is expected to lag
behind the rise in crude costs, the average comprehensive refining profit at
Shandong independent refineries is estimated to reduce.