The window for downward adjustment to domestic oil product retail ceiling prices may open in the first half of July, as international crude market remains under a downward trend, C1 estimated. Crude prices are under pressure in part because International Energy Agency releases 2-mil bbl of stockpiles each day.
Since China last adjusted the retail ceiling on Apr 7, the average prices of Brent, Dubai and Cinta slid 0.25% up till Jun 27, C1’s data showed. If Brent crude is below US$106/bbl, the drop in the average of the crude basket will reach 4% in Jul 8-12, which means the conditions for trimming oil product retail ceilings will be met.
Based on a drop of 4-5% in the average price of Brent, Dubai and Cinta, the retail ceilings of gasoil and gasoline are supposed to be marked down by Yuan 150-200/mt.
Domestic gasoil and gasoline wholesale markets have been sluggish in the past few days amid expectation of lower prices. Some market players try to sell off their resources at relatively low prices, but most buyers show weak interest and they keep consuming stockpiles.
