Overview: With US-Iran tensions escalating, international oil prices moved sharply higher. Gasoline prices at independent refineries in Shandong surged rapidly, and high-olefin C5 prices in Northwest China continued to rise, with the average price closing higher. As of September 3, the weekly average price of high-olefin C5 in Northwest China stood at 8,847 yuan/mt, up 142 yuan/mt from the previous cycle's average, an increase of 1.64%.
I. High-Olefin C5 Market Hits Another Record High
Recently, spot prices for high-olefin C5 in Northwest China have risen, reaching a high of 9,007 yuan/mt and setting another record for the year. Renewed military conflict between the US and Iran heightened market concerns over geopolitical and supply risks, pushing international oil prices higher. Refined oil product prices in Shandong spiked quickly, though midstream and downstream players gradually slowed their market purchases, and the gasoline market began to level off. Supported by bullish signals from both the crude oil and gasoline markets, high-olefin C5 producers in Northwest China actively pushed prices up while selling. Traders and downstream plants accelerated their procurement and chased the rally.
II. US-Iran Conflict Pushes Costs Up, High-Olefin C5 Prices Hit Fresh Highs
International oil prices rose substantially, with average prices also moving higher. As of September 2, WTI stood at $91.01/bbl, up 8.95% from August 27, while Brent stood at $95.63/bbl, up 6.61% from August 27. The key bullish factors behind this week's oil price gains were: renewed military clashes between the US and Iran, attacks on some oil tankers passing through the Strait of Hormuz, and stronger market concerns over geopolitical and supply risks.
III. Refined Oil Products Rally Strongly, Lifting High-Olefin C5 on the Demand Side
Refined oil product prices at independent refineries in Shandong surged sharply (92# gasoline at 9,608 yuan/mt, up 673 yuan/mt or 7.53% month-on-month and up 2,055 yuan/mt or 27.21% year-on-year; 0# diesel at 8,505 yuan/mt, up 633 yuan/mt or 8.04% month-on-month and up 2,035 yuan/mt or 31.45% year-on-year). The rebound in international crude futures boosted market sentiment, and refined oil product prices in Shandong rose accordingly, with regional refineries successively hiking prices. However, as prices climbed rapidly, midstream and downstream merchants gradually slowed their procurement. Fortunately, the "golden September" season arrived: after the fishing moratorium ended in northern regions, marine diesel demand increased and boosted diesel consumption, while the gasoline market remained relatively steady.
IV. Market Outlook
Crude oil: International oil prices are expected to have room to rise next week, with WTI likely to trade at $84–93/bbl and Brent at $89–98/bbl. The core logic behind this forecast is that tensions from the US-Iran military conflict persist and the fighting carries a risk of spillover. Shipping risks in the Strait of Hormuz have increased, and geopolitical instability is providing stronger support to oil prices.
Demand: Wholesale and retail price ceilings for refined oil products are expected to be raised in the current pricing cycle, which is a positive signal for the oil market. Refined oil product prices in Shandong are expected to extend their gains. Intermediary traders have increased orders with locked-in prices, while downstream users have mostly maintained high inventory levels. Market buying and selling sentiment remains fair. Shandong independent refinery gasoline and diesel prices are expected to dip first and then rise next week.
High-olefin C5: The high-olefin C5 market is expected to consolidate at high levels in the near term. Crude oil fundamentals are strongly supportive, while gasoline is moving sideways. The bullish market atmosphere remains, but market participants are turning cautious and the momentum for further gains is insufficient. The high-olefin C5 market is expected to fluctuate at high levels today, with limited upside and downside room.
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