Gasoline vessel single-trip consumption supports tight supply and rising prices for aromatics-related products.

Introduction: Geopolitical conflicts have recently generated frequent headlines, yet there are no signs of de-escalation. International crude oil futures remain elevated. Following regulatory adjustments to retail gasoline prices, the latest price revision was held steady (no change), keeping the gasoline market at a high level. Supported by replenishment orders from shipping vessels, prices for aromatics-related products have remained firm.

1. Gasoline Market Momentum Slows, Leading to Slight Pullback in Aromatics-Related Products

Although news flow has been active recently, geopolitical tensions have not eased, and crude oil continues to trade on a stronger trend, bolstering market sentiment. On the gasoline side, prices have declined slightly due to reduced exports of refined petroleum products. Refineries have not balanced their shipments via road tankers, providing limited support to the prices of aromatics-related products. Overall supply of these products remains low; some plants utilize gasoline internally for production, helping keep prices relatively firm. With production and sales not fully balanced, average prices closed higher.

2. Analysis of Changes in Market Demand

(Figure 2: Comparison Chart of Production-to-Sales Ratios for Aromatics-Related Products)

Recently, international crude oil futures have maintained consolidation at high levels, providing certain support to the market. Downstream customers show limited willingness to chase rising raw material prices. However, as the overall supply of aromatics-related products remains low, the production-to-sales ratio has stayed around 70–80%. Supported by internal consumption for ship bunkering at refineries, production and sales remain balanced.

3. Market Outlook

Crude Oil:
International oil prices are expected to see modest upside potential next week. WTI is projected to range between $92–$98 per barrel, while Brent may move within $103–$109 per barrel. The core logic underpinning this forecast involves intensifying bullish and bearish factors. Risk premiums driven by Middle Eastern geopolitical disruptions will continue to support prices, but weaker demand expectations and former President Trump’s remarks aimed at suppressing oil prices will exert downward pressure, limiting significant gains. Key areas to watch include:

1. Supply: The US-Iran stalemate persists, with traffic through the Strait of Hormuz declining again in October. Houthi attacks on Saudi Arabia continue, keeping passage through the Bab el-Mandeb Strait at low levels. There is no obvious relief in crude oil supply risks.
2. Demand: Traffic through the two major straits remains weak, and some Asian refineries plan to reduce operating rates. Combined with institutions lowering global crude oil demand forecasts and the end of peak fuel consumption season in the US, overall crude oil demand faces pressure.
3. Geopolitics: Core differences between the US and Iran remain unresolved, leading to a deadlock. Signals from the US and Israel suggest that direct conflict with Iran will not escalate before the mid-term elections. Mediators such as Qatar continue to promote dialogue and negotiations, slightly easing market fears of a full-scale US-Iran war. Meanwhile, Houthi attacks on Saudi Arabia have intensified, sustaining geopolitical uncertainty in the Middle East.
4. Financial Factors: The probability of a Federal Reserve rate hike in October is low, possibly influenced by mid-term election dynamics, though the likelihood of a hike in December remains high.

Gasoline:
With international oil prices expected to rise slightly and initial estimates suggesting an upward adjustment in the wholesale and retail price caps for refined products, news factors provide positive implications for the oil market. Consequently, refined product markets in Shandong are expected to remain firm. Mid-stream and downstream traders are placing rational orders, while refineries maintain intentions to support prices, resulting in decent trading activity. Next week, gasoline prices at independent refineries in Shandong are predicted to decline slightly within a narrow range, while diesel prices are expected to fluctuate upwards.

Conclusion:
In summary, crude oil prices may continue to rise amid strong uncertainties regarding geopolitical conflicts. In October, domestic gasoline ship-order transactions in China remain robust, although overall export plans have been significantly reduced. Ship-bunker demand continues to support the consumption of aromatics-related products. Therefore, prices for aromatics-related products are expected to fall first and then rise.