Sinopec Economics: Crude oil declines amid weak demand; gasoline and diesel retreat from high levels

As the May Day holiday approaches, gasoline demand continues to be mainly weak. The next round of retail refined oil price adjustments is still expected to be downward. Before the holiday, downstream fuel stations procure at a relatively slow pace, with weaker expectations for pre-stocking; they mainly focus on digesting inventory, with only occasional replenishment when prices are low. Gasoline prices still face downward pressure, and there is relatively ample room for prices to fall when they are high. Diesel demand is trending steadily. Currently, spring plowing and outdoor construction activities have relatively stronger demand for diesel, and the logistics and transportation industry is operating smoothly. Procurement of diesel for essential needs is steady, with replenishment in adequate amounts when prices are low, which provides some support for diesel prices to stay from falling further. It is expected that gasoline prices will keep moving lower, while diesel prices will mainly see declines from their high levels. In the low-price area, the magnitude of the declines will narrow. It is not ruled out that prices may rebound when prices are low in the future, but such rebounds lack sustainability. Going forward, attention should still be paid to adjustments to refined oil export policies, which may have an impact on changes in domestic market supply and demand. (Zhuochuang Information)