It is expected that the gasoline crack spread will bottom out soon after hovering around the 10-year average, as the traders gradually build up stocks amidst falling gasoline prices, per OilChem data.
Source: Mysteel OilChem
The gasoline crack spread has been falling since entering 2024 except for early February when the market players were active in stockpiling for the consumption peak during the Chinese New Year holiday, shoring up gasoline prices.
Source: Mysteel OilChem
According to OilChem data, the gasoline crack spread was down 34.12% as of March 18, compared with the beginning of January. During this period, China's #92 gasoline price managed a collective gain of 1.64%, against the international Brent price surging 14.5%, leading to narrowing spread when the market fundamentals were weak.
The recent fall in gasoline crack spread was primarily attributed to sagging demand post the holiday, and the traders remained wait-and-see on the belief that the crack spread was still high.
Nevertheless, the gasoline crack spread is projected to bottom out with some traders stockpiling appropriately amidst constantly falling gasoline prices, and the stabilizing consumption after the temperature rebounds will also offer certain support.
On the contrary, the gasoil crack spread is in lack of momentum after rebounding from the near-term bottom set on February 23, which prompted the market players to purchase on dips.
Source: Mysteel OilChem
Looking ahead, the traders have reported mounting gasoil stocks which were purchased when the gasoil crack spread was low. Therefore, there is possibility that the gasoil crack spread will keep pulling back in the near term.
Written by Aggie Hu, huchenying@mysteel.com
Edited by Navy Liu, liuchuanjun@mysteel.com