Escalating tensions in the Middle East have pushed international crude oil prices higher. Shandong independent refineries have raised product prices frequently, with midstream and downstream players following the upward momentum into the market. Trading sentiment was active, and both truck-and-vessel transaction volumes improved. Buoyed by a combination of bullish factors, blended C5 in Shandong extended its gains. As of August 27, the weekly average price of blended C5 in Shandong stood at 7,606 yuan/mt, up 342 yuan/mt or 4.71% from the previous week.
Supported by geopolitical factors, international crude oil prices trended upward, with the monthly average rising versus July. In August, Shandong independent refineries raised their monthly average refined fuel prices, with both gasoline and diesel increasing. The monthly average price of China VI 92# gasoline was 8,597 yuan/mt, up 736 yuan/mt or 9.36% month on month. With bullish sentiment prevailing in both the crude oil and gasoline markets, along with concentrated port gasoline orders prompting feedstock preparation, blended C5 refineries faced no spot supply pressure and were highly confident in pushing prices up. Blended C5 market prices rose in a fluctuating uptrend, with traders and downstream plants participating actively and healthy transaction activity throughout the month.
In August, Shandong independent refineries raised their monthly average refined fuel prices, with both gasoline and diesel moving up. The monthly average price of China VI 92# gasoline was 8,597 yuan/mt, up 736 yuan/mt or 9.36% month on month, while China VI 0# diesel averaged 7,485 yuan/mt, up 751 yuan/mt or 11.15%. Both gasoline and diesel prices fluctuated upward over the month. International crude oil prices were volatile during the period but trended higher overall. Meanwhile, major state-owned refiners stepped up external procurement, vessel-order volumes at Shandong independent refineries remained high, and inventories fell below 20%, giving suppliers ample confidence to hold prices firm. The regional supply-demand balance improved considerably, supporting sustained gasoline and diesel price gains through the month.
Crude oil: International crude oil prices are expected to have room to fall in September 2026. The core logic is that as the geopolitical premium is gradually digested, seasonally weaker fundamentals may dominate the September market. If US-Iran mediation makes substantial headway and navigation through the strait improves, downward pressure on oil prices could intensify further. WTI is likely to trade in the range of $77-87/bbl, with Brent in the range of $83-93/bbl.
Demand: In mid-to-late September, midstream and downstream players are expected to begin building inventories ahead of the Mid-Autumn Festival and National Day holiday. The domestic gasoline and diesel markets are expected to dip first and then rebound in September, with diesel trending up with fluctuations, although overall movement should remain limited. Month-on-month, average gasoline and diesel prices are expected to be higher, with gasoline averaging 9,000 yuan/mt and diesel averaging 8,150 yuan/mt.
Blended C5: The domestic C5 light-components market is expected to fluctuate narrowly in September. The core logic is that with September gasoline export volumes remaining stable, domestic refinery turnarounds concluding, and circulation supply in the blended C market expected to recover, the market is likely to maintain high-level fluctuations overall.
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