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Crude oil prices plummeted, geochemical refining entered a "price upside down" torment period

Crude oil prices plummeted, geochemical refining entered a "price upside down" torment period

(Summary description)International oil prices that have been rising all the way since August have stopped rising and turned down at the end of October.

Crude oil prices plummeted, geochemical refining entered a "price upside down" torment period

(Summary description)International oil prices that have been rising all the way since August have stopped rising and turned down at the end of October.

Information

  International oil prices that have been rising all the way since August have stopped rising and turned down at the end of October.

 

  In the evening of November 23, WTI January crude oil futures fell 7.1% to 50.42 US dollars; Brent January crude oil futures fell 6.07%, fell below the 60 US dollar mark and closed at 58.8 US dollars. Both prices have fallen by 34% and 31.9% from their nearly four-year highs set in early October.

 

  Continued lower oil prices have caused a strong bearish sentiment in the market, which has a significant inhibitory effect on the domestic refined oil market and directly affected the production and operation of the refinery. According to interface news reporters, many local refineries in Shandong began to stop production and reduce volume.

 

  According to Longzhong Petrochemical Network, the recent decline in product prices has led to poor profitability of refineries. Shandong Hengrunde Group, Shangneng Holdings (Group), Keyu Energy and other refineries have started short-term shutdowns under normal pressure and pressure.

 

  Xu Wenwen, a product oil analyst at Longzhong Information, told the interface reporter that there was almost no delay in the prices of refined oil products in Shandong and international crude oil. The sharp rise and fall in crude oil prices will be reflected in refinery prices that day.

 

  Xu Wenwen said that the drop in crude oil prices and the decline in refining costs formed a drop in refined oil prices, which also led to an increase in wait-and-see mentality in the midstream and downstream markets, reduced market transactions, cautious end-user purchases, and reduced orders from middlemen.

 

  In the long run, the decline in crude oil prices is conducive to the production and operation of refining and chemical enterprises. However, it usually takes 1-1.5 months from procurement to actual production and use, and the benefits of low oil prices cannot be released immediately. The refinery is produced with high-priced crude oil purchased more than a month ago, and the price is reversed with the refined oil sold at low prices, which easily results in losses.

 

  This is also the torment period that refining and chemical companies must go through during the process of oil prices falling from high to low. Refining often has a single product structure and relatively lacks anti-risk capabilities.

 

In order to ease the pressure of rapid inventory growth, geochemical refining often adopts measures to reduce prices and volume. Xu Wenwen said that large-scale refining has a large output and rapid inventory growth, which has been greatly affected by the decline in oil prices; small refineries have lower output and less pressure on sales and inventory. , Has already begun to reduce production to varying degrees, the impact this time is limited.

 

  Changes in oil prices have a relatively small impact on the production of state-owned refineries.

 

  A production leader of Sinopec Yangzi Petrochemical Co., Ltd. told the interface reporter that crude oil is purchased and stored in batches, and changes in oil prices will directly affect the company's profitability, but each branch company has the production tasks of the group headquarters. , Will not reduce or stop production, currently Yangzi Petrochemical has been under full load.

 

The person said that because the state-owned refinery has a richer product portfolio, it is also more resistant to risk.

 

Xu Wenwen said that the current international oil price is nearing the bottom, but the possibility of continued decline can not be ruled out, and the international oil price has a significant supporting effect below 60 US dollars / barrel. (From the official website of Changxing Island Petrochemical Market)

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