According to the National Development and Reform Commission's website, since the adjustment of domestic refined oil prices on September 21,2022, oil price volatility in the international market has been operating according to the current domestic refined oil price mechanism, the average price for the first 10 working days of October 10 compared with the average price for the first 10 working days of September 21, the price adjustment amount is less than 50 yuan per ton. According to article 7 of the“Oil price management measures”, the current price of gasoline and diesel oil will not be adjusted, and the unadjusted amount will be added or offset in the next price adjustment.
The international oil price rises, but the domestic product oil price does not make the adjustment! On October 8, international oil prices rose significantly. Light crude for November delivery rose $1.24, or 3.10 percent, to close at $41.19 a barrel on the New York Mercantile Exchange December Brent Crude rose $1.35, or 3.22 per cent, to $43.34 a barrel. However, the national development and Reform Commission said that the domestic gasoline, diesel prices (standard) will not be adjusted. Relevant Price linkage and subsidy policies shall be implemented in accordance with current provisions. Since the beginning of this year, domestic refined oil prices have undergone 18 adjustments, including 11“Stranded”, four downward adjustments and three upward adjustments. Gasoline and diesel prices have been reduced by 1,860 yuan and 1,790 yuan per ton respectively.
During the National Day holiday, international oil prices rebounded significantly, mainly by OPEC and non-opec oil producers decided to more large-scale production cuts and other factors. From Oct. 3 to Oct. 7, two major crude oil futures Rose for a fifth consecutive session, up more than 15 percent. oil futures returned to $90 a barrel on Oct. 7, reaching $93, while oil-filled futures returned to above $95 a barrel, it hit $98 a barrel in October. As the fluctuation of crude oil during the holiday period included in the price adjustment cycle, crude oil rate of change from negative to positive, and in the positive low volatility.
The next price adjustment window for domestic oil products is 24:00 on October 24, according to the current crude oil price level, the new cycle of crude oil change rate is at a positive high, the atmosphere of strong upward adjustment.
In this round of refined oil price adjustment cycle, the international oil price first fell and then rose. National Development and Reform Commission Price Monitoring Center predicted that the recent increase in international oil price volatility, a small increase is more likely.
Without a“Black swan” or hard landing in the global economy, especially overseas economies, the market will gradually transition from sentiment trading to the verification stage of a recession in demand, oil prices in October or gradually into a period of turbulence, rebound. On the one hand, the current global crude oil market low inventory, low supply and demand pattern has not changed, the crude oil market in the continued trading recession there is a short-term risk of oversold. And this oversold rebound has a higher probability as OPEC + cut production beyond the expected deduction into a monthly level rise. On the other hand, risk appetite is likely to pick up marginally in the fourth quarter.
It is important to note that even a monthly rebound is unlikely to happen overnight, given the current more bearish macro sentiment. Oil prices may slow this week after rising sharply on the fourth of July. But in the long run, the recovery rally is not over. The center of gravity of oil prices may recover in part in the fourth quarter. The two oil companies in the outer market have a chance to return to $100/barrel before hitting a new low in the medium and long term.
