The global oil market has seen a continued upward trend, with industry sources suggesting that if domestic crude oil prices keep rising during the Chinese New Year holiday period, refined oil prices in China are likely to be adjusted upwards after the festival. Despite a slight correction on February 4th, the overall trajectory of international oil prices remains bullish. Market participants believe that the upward momentum will resume following any short-term pullback.
According to analyst Li Qian from Zhuo Chuang, factors such as geopolitical tensions, supply disruptions, and economic indicators play a key role in shaping oil price movements. The current crude oil market is in a peak consumption season, with favorable conditions supporting higher prices. Early January saw support from the expansion of U.S. pipeline capacity and Saudi Arabia's production cuts. Later, instability in the Middle East further fueled market concerns and pushed prices higher. At the end of January, the delay in resolving the U.S. debt ceiling eased fears of a financial crisis, while ongoing monetary easing and improved economic data from major economies contributed to rising oil prices.
"In the context of sustained economic recovery, continuous liquidity injection, and improved risk appetite, crude oil prices are being supported by multiple factors," Li Qian noted. While prices are expected to rise gradually, they may face resistance due to global oversupply pressures. Breaking the $100 per barrel threshold will require stronger fundamental support.
Domestic oil price increases are anticipated to be significant. According to monitoring data from the Business Society, as of February 4, the rate of change for crude oil in the three regions reached 1.99%. This upward trend has already started influencing market sentiment.
Additionally, hazy weather conditions have prompted Sinopec to accelerate its equipment upgrades and decommissioning projects. By the end of this year, 12 subsidiary companies will complete their upgrades and start operations. Starting next year, China will fully implement the fourth-grade oil standards. This "oil product door" has raised concerns among consumers about potential cost increases, which could lead to higher retail fuel prices. Analysts suggest that these upgrades may further reinforce expectations of a domestic price hike.
Currently, most major oil companies remain optimistic about the market. Some have begun cautiously increasing diesel prices by approximately 50 yuan per ton. However, with the approach of the Spring Festival, many industrial and mining companies, along with infrastructure firms, have halted operations, and logistics activities have slowed down. As a result, demand for diesel has declined, while gasoline consumption has remained relatively stable. In most parts of China, both gasoline and diesel prices have stayed steady, with traders adopting a wait-and-see approach.
Under the current "Administrative Measures on Oil Price (Trial)", the price adjustment window for refined oil products opens once the rate of change reaches 4% within 22 working days. If crude oil prices and the rate of change continue to climb, upward pressure on domestic refined oil prices will increase. Li Hong predicts that the fastest possible price increase could occur after the Lantern Festival, marking the first rise in 2013, potentially around 300 yuan per ton. He also believes that if the rate of change exceeds 4% during the traditional Chinese New Year holidays, the government might delay the first price adjustment of the year to ensure sufficient fuel supply for the holiday period.
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