There are only the last 3 working days left before the oil price will be adjusted again. Although the price adjustment amount corresponding to the oil price fell by 40 yuan/ton yesterday, the price adjustment amount has continued to rise in the first 6 working days, resulting in the current price adjustment amount still recording an increase. The statistical results show that the crude oil change rate is 3.32%. The price of gasoline and diesel is expected to increase by 230 yuan/ton, exceeding the oil price increase red line by nearly 200 yuan/ton. The oil price adjustment after 3 working days may start to increase again.
International oil prices both recorded a fall after the start of the new week due to weak European demand. European demand for diesel will weaken entering 2023 due to high energy prices and soaring inflation, which has seriously affected the region's economic growth prospects. However, with the interruption of Russian diesel imports, supply constraints may exceed the rate of consumption decline, which will support European diesel prices in the first quarter of 2023.
The EU ban on imports of Russian oil products will come into effect on February 5. According to Vortexa, more than half of the diesel and gasoline arriving in Europe by sea in 2022 will come from Russia, which means that about one-tenth of the region's demand is met by Russian products. Although the upcoming ban was announced in the summer, it has not been gradually lifted. Europe imported much more diesel and gasoline from Russia in November 2022 than in the same period last year.
Diesel demand in Europe has fallen by about 10%, equivalent to the proportion of European diesel supplies that currently come from Russia, but in the unlikely event of a downturn, demand for other petroleum products will also fall and refineries will be forced to significantly reduce production. This means that when Russia stops importing diesel, local diesel production will also decrease, so even in the event of a severe recession, supply may still fall short of demand.
The European economy is gradually heading into recession. The manufacturing purchasing managers' index shows that the European economy has contracted since the summer and inflation has exceeded 10%. This has prompted the central bank to take action to increase interest rates in an attempt to cool economic activity. All of this will suppress demand, at least in the UK and Germany, this seems to be the case. A report from
Rystad Energy shows that the background for 2022 is a downward impact on energy demand, which is the result of the epidemic, which initially led to a 30% reduction in energy investment. Energy spending then resumed, while households quarantined by the coronavirus put their savings toward buying goods, the report added, triggering a squeeze on global supply chains and causing inflation to surge to levels not seen in 40 years.
In terms of the oil market, the oil market is currently at a weak level due to higher-than-expected production in the United States and Venezuela . Despite the oil embargo, Russian oil has still managed to find a market. Taking into account this supply situation, as well as the uncertainty of Asian oil demand early next year, the crude oil market is likely to remain weak in the first quarter of 2023.
According to a decree signed by Putin , Russia plans to ban oil sales to countries that comply with the G7 price ceiling from February 1, which will boost international oil prices for a certain period of time.
The Group of Seven, the European Union and Australia have imposed a price ceiling of US$60/barrel on Russian seaborne crude oil since December 5.
The latest prices of No. 92, 95 and 98 gasoline nationwide on December 29
