Yangcheng Evening News - reported by journalist Li Xiaoli: Following the "invitation" extended to China National Petroleum Corporation (CNPC) and Sinopec on October 29th by the National Development and Reform Commission (NDRC) due to the ongoing tight situation of diesel resources, the situation of diesel supply appears not to have improved immediately.
The NDRC had issued an urgent notice titled "On Ensuring Stable Diesel Supply at Present," requesting a coordinated approach to allocate resources, reasonably manage inventory, increase resource deployment in sensitive and inventory-weak areas, and earnestly ensure key agricultural needs such as the "three autumn" production. According to insiders, the state has already put forward specific requirements for the two major companies regarding resource security.
"From the data published by the Economic Operation Regulation Bureau on the finished oil inventory in the sales systems of CNPC and Sinopec in 13 major grain-producing areas, it can be seen that the total amount is showing a declining trend. The inventory total as of October 26th fell by 0.54% compared to October 23rd," revealed Han Jingyuan, an analyst from the commodities e-commerce platform JinYinTao. "The current shortage of market circulation resources is an undeniable fact. Mainstream institutions are controlling wholesale sales volumes to ensure retail terminal supplies; while traders, struggling to find oil, are turning to purchasing inverted resources, which results in high costs, squeezed survival space, and no sight of private gas stations offering discount promotions."
The industry generally believes that the tight situation will last at least until mid-to-late November. "Subsidiary refineries of the two major companies will gradually stop inspections at the end of October and mid-November. The upstream production process will stabilize, but product output still needs to go through testing, logistics, and other processes," disclosed Han Jingyuan. Additionally, it's understood that CNPC and Sinopec, in order to ensure supply, have increased diesel imports, which will also be successively released to the market. However, all these require some time for circulation before they can be reflected in downstream terminals. Therefore, it is estimated that the supply will slightly improve compared to October, temporarily ensuring the retail market meets daily needs, while wholesale sales will still be difficult to substantially open up.