Four factors affect the supply and demand of domestic refined oil

As China's oil consumption grows steadily and the degree of dependence on foreign oil continues to rise, the impact of high oil prices on the economy is increasingly evident. From March 18 to 19, the relevant experts pointed out that the recent international oil price continued to rise, which not only means that domestic refined oil price adjustments, but also the “3rd Shandong Geogrid Market and Development Summit and the 2nd Sino-foreign Oil Business Summit” held on March 18-19. The window is about to open again, which further implies that the follow-up price surge of chemical products may follow, and related industries will also be affected.
According to statistics, in 2009, the country's crude oil processing volume was 374.6 million tons, an increase of 7.9% year-on-year. Among them, the refining processing volume of CNPC and Sinopec's two major groups reached 125 million tons and 183 million tons, respectively. Affected by the economic crisis, from November 2008 to April 2009, the demand for refined oil products in the domestic market was bleak. Sales of downstream companies were under pressure, inventory increased, and refinery operating rates continued to decline. However, since May 2009, the refinery utilization rate has continued to rise.
In 2009, China's refined oil production was 228 million tons, an increase of 9.4% year-on-year. Among them, 71.948 million tons of gasoline production and 141.868 million tons of diesel production, respectively, an increase of 13% and 6%. Constrained by the recovery of the domestic economy, industrial diesel sales are sluggish; while the strong growth of the automobile industry has led to a substantial increase in gasoline sales, and major refineries have lowered the ratio of diesel and diesel engines to lower warehouse sales.
Ding Shaoheng, a senior engineer of the China Petroleum Planning Institute, believes that domestic demand for refined oil will increase by 7.9% in 2010, and at least 25 million tons/year of refining capacity is expected in 2010. With the recovery of demand, oil prices will rise. The average annual oil price for 2010 is expected to be US$77/barrel, which is significantly higher than the level of US$61/barrel in 2009. By the end of 2009, the domestic crude oil processing capacity was close to 500 million tons/year, and it is expected to reach 520 million tons/year in 2010. Considering that the crude oil price level in 2010 will be higher than in 2009, and domestic refined oil prices still implement the current lagging adjustment principle, it is expected that social resources will not be higher than in 2009. According to the refinery full load calculation, in 2010 there will be a surplus of 15 to 18 million tons of refined oil resources in China; if measured in accordance with the operating rate in 2009, there will be a gap in resources. It is expected that under the recovery of demand recovery, the main domestic refinery operating rate will increase by 5 to 7 percentage points, and the supply and demand of the refined oil market will maintain a wide balance.
Ding Shaoheng analyzed that the factors affecting the supply and demand of domestic refined oil products in 2010 are as follows:
——The auto market's new policies have prompted the car sales volume to continue to rise. It is expected to reach 15.8 million vehicles in the year, an increase of 16% year-on-year. The demand for cars will boost gasoline vehicle ownership and increase oil consumption steadily. The Automobile Research Center expects that the proportion of car sales in cars will reach 70% in 2010, up by 1 percentage point from 2009; the proportion of private car ownership and small-displacement cars continues to rise, and the time for large numbers of cars entering the family has arrived. In 2010, auto sales will still maintain double-digit growth, but the average fuel consumption of bicycles will continue to decline, and gasoline demand is expected to increase by 7% throughout the year.
- Deterioration in demand for agricultural vehicles, negative growth in demand for oil The majority of consumers in rural areas who are willing to purchase light trucks have their demand for cars released in 2009; agricultural vehicles are heavily replaced by light trucks, and their holdings will continue to decline in 2010. Decrease by 5% year-on-year.
- Stable growth of agricultural oil The income of farmers will continue to increase in 2010, and the purchasing power in the future and the enthusiasm for farming will be higher. At the end of 2009, the total domestic agricultural machinery power reached 813 million kilowatts, and it is expected to increase to 835 million kilowatts in 2010. In 2010, the agricultural oil used in the year increased steadily by 3% year-on-year.
- The demand for oil for logistics transportation will rebound. The high energy-consuming industries such as industrial production, construction and other high-energy-consuming industries will have high oil consumption before and after the end of the year, showing a year-on-year growth or a slight increase year-on-year; the demand for oil for basic industries such as fishery will not change much. The total diesel fuel demand for the year increased by 8.5% year-on-year; kerosene demand increased by 6% year-on-year, a decrease of 7 percentage points from 2009.
In view of the current low operating rate of refineries, Ding Shaoheng suggested that firstly, refineries should determine the long-term supply channels and prices of raw materials. If they wait until the rise in crude oil prices and then find supply channels, it will be more difficult; second, refinery companies should continue In accordance with the principle of low fuel-air ratio in 2009 to arrange production; once again, dealers should do a good job before and after the price adjustment and purchase of resources; Finally, sales companies should expand the terminal retail network, in the current situation of oversupply, the construction of retail networks is very necessary.

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