Oil prices will lowered down by 300 Yuan

　　Recently the oil prices in international market have been continuously low and the U.S. WTI prices nearly went down to the bottom constantly, which drag the prices in Brent, Dubai / and Cinta down to -1.89% from a growth of 4.18% ten days before. May 27, according to CBI’s C1Energy, if the oil in the international market maintains low prices in the next few days, theoretically, domestic oil prices will also come down this weekend or early next week.

　　According to the data from C1Energy, till May 26, the weighted average changing rate of crude oil prices in the above three places rate has reached -1.89%. And during this period, the average price gained a growth rate of 6% in May 5. From May 14, the prices began to be adjusted. However, as then the crude oil prices was already declining, and domestic and international economic situation were taken into consideration, the State did not have prices adjusted.

　　According to industry sources, because of the low prices in U.S. market and the high crude oil stocks, future prices in the international market still has no drives to be boost. If the WTI crude oil continued to be low within this week, then when the market is closed in May 28, the changing rate of crude oil prices in the above three places will fall down by more than 4%. More likely, the next few days WTI crude oil will be steadily kept at the level of70 dollars / barrel, then when the market is closed next Monday (May 31), the changing rate of crude oil prices in the above three places will also fall down by more than 4%. Then theoretically, it will be right time to cut down the retail prices.

　　According to management measure for oil price (for Trial Implementation)” released in May last year by the State Development and Reform Commission, “if crude oil prices in the international market has been changing by more than 4% averagely for 22consecutive working days, the prices in domestic market can be adjusted accordingly.” The last time for the State Development and Reform Commission to change the oil prices is April 14, when the domestic retail price of gasoline and diesel was up to 320 Yuan / ton.

　　Since the pricing mechanism has been carried out, the State reduced the retail price rapidly. Therefore, according to C1Energy, it should never be ruled out following the old cases, the relevant state departments will lower the domestic retail prices next Tuesday or Wednesday. What is more, as in the short term the possibility of crude oil to rebound sharply is small and the existent of higher domestic inflation as well as reduced oil demands aroused by frequent natural disasters, it is much likely that Development and Reform Commission will reduce the oil prices next week.

　　According to C1Energy, if the retail price can be adjusted timely and then the price changing rate in the above three places will remain at about 5%, the prices of gasoline and diesel in our domestic market can be dropped by about 250 Yuan / ton -300 Yuan / ton. If the declination rate is higher at 6% -7%, the retail prices will be lowered down by 300 Yuan / ton -400 Yuan / ton.

　　(Translator: Yalong/Jessie)

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