Lead: International crude oil futures have pulled back amid fluctuating trade, yet refinery quotes for refined oil products held firm, underpinned by inventory and profit support. Summer terminal consumption boosted procurement and sales activity among gas station operators. Buoyed by these favorable terminal conditions, the high-olefin C5 market in Northwest China trended upward amid fluctuations. As of August 13, the average market price of high-olefin C5 in Northwest China stood at RMB 8,187/ton, up RMB 1,208/ton from the same period in July, an increase of 17.31%.
I. Northwest China High-Olefin C5 Market Prices Continue to Rise
Since early July, high-olefin C5 prices in Northwest China have been trending upward amid market fluctuations. International crude oil prices have swung in a wide range. On the gasoline front, increased summer travel frequency and heavier use of in-vehicle air conditioning during hot weather have kept overall offtake smooth at retail gas stations. Many station operators across various regions reported shortened procurement-sales cycles and generally high inventory positions. Against this favorable terminal sentiment, the high-olefin C5 market in Northwest China climbed with fluctuations, with refineries holding firm on price quotes and achieving smooth sales. Traders and downstream plants actively entered the market, chasing higher prices to build inventories. As of August 13, the average market price of high-olefin C5 in Northwest China reached RMB 8,187/ton, up RMB 1,208/ton from RMB 6,979/ton in the corresponding period of the previous month, an increase of 17.31%.
II. Strong Terminal Demand Is the Main Driver of High-Olefin C5 Price Increases
The consecutive rise in international crude oil prices has, to a certain extent, lifted market sentiment, with purchasing sentiment fluctuating in line with market movements. As of August 13, the price of 92# gasoline at Shandong independent refineries stood at RMB 8,475/ton, up RMB 168/ton week-on-week, an increase of 2.02%; the price of 0# diesel was RMB 7,352/ton, up RMB 260/ton week-on-week, an increase of 3.67%. Continuously rising costs, coupled with declining inventories, jointly drove gasoline and diesel prices at Shandong independent refineries to strengthen.
III. Market Outlook
Crude oil: International crude oil prices are expected to have room for gains next week, with WTI likely to trade in the USD 79-86/barrel range and Brent in the USD 85-92/barrel range. The core logic behind next week's price forecast: The US-Iran standoff persists, US policy remains erratic, and the Middle East situation is unstable. Both the US and Iran have asserted sovereign control over the Strait of Hormuz, and the strait has yet to reopen, heightening supply-risk concerns.
Demand side: Wholesale and retail price ceilings for refined oil products in the current round are expected to decline. This news flow will weigh on the oil market. Refineries are expected to focus on clearing inventories, while end users and traders will remain cautious in their purchasing operations, resulting in a subdued market atmosphere for buying and selling. Gasoline and diesel prices at Shandong independent refineries are expected to fluctuate slightly lower next week.
High-olefin C5: High-olefin C5 market prices are expected to slip from current elevated levels in the near term. Crude oil is expected to rise next week while gasoline edges down, leaving limited positive market signals. At present, downstream production margins for high-olefin C5 are inverted. Taking all factors into account, high-olefin C5 prices are expected to decline in the short term.
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