The National Development and Reform Commission announced on March 4th that domestic oil prices in China will be increasing for the third time since 2024. The price of gasoline will rise by 125 yuan per ton, while diesel will increase by 120 yuan per ton, resulting in higher costs for consumers and businesses alike.
The rise in oil prices can be attributed to various factors in the international market, including geopolitical tensions leading to supply uncertainty, potential extensions of production cuts by OPEC+, and fluctuations in U.S. crude oil inventories. These factors have contributed to an overall strengthening of the crude oil market.
As a result of the increased oil prices, the share prices of major oil companies in China, such as CNOOC and PetroChina, have seen significant gains. CNOOC’s stock price rose by over 7% on March 4th, reaching a new high since listing with a market value of 1.3 trillion yuan.
Looking ahead, analysts predict that the next round of oil price adjustments is likely to result in further increases. Factors such as the extension of production cuts by OPEC+ and ongoing geopolitical tensions are expected to contribute to a continued rise in oil prices.
However, there are still uncertainties in the market, and the final outcome of the price adjustments remains to be seen. Retail prices of gasoline and diesel may also see fluctuations in the coming months, with diesel demand expected to improve while the gasoline market may return to normal levels.
Overall, the oil price increases in China reflect the broader trends in the international market and serve as a reminder of the interconnected nature of global oil markets.