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Crack spreads (not the ginfreely CheeBye kind), the margin of refining is now negative...
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Serious Shell Singapore,Entire Jurong Island refiners losing $ billions a day
- Thread starter SalahParking
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Good news indeed.
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premium gasoline prices dropped by 26.9% in sillycon valley. sg leh?
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Global oil refiners to deepen output cuts as virus destroys demand
Home / Oil & Energy / Oil & Companies News / Global oil refiners to deepen output cuts as virus destroys demand
Oil refiners from Texas to Thailand are bracing for deeper output cuts, bruised by an unprecedented demand shock as more countries lock down and restrict travel to contain the spread of the coronavirus.
In Asia, home to over a third of the global refining capacity, India’s top refiner has slashed output by up to 25%-30% while operators in Japan, South Korea and Thailand – already running at reduced rates – are looking at more cuts even as they shut plants for maintenance.
Several refineries in Europe and the United States have also cut output since last week.
China, which restarted its economy after weeks of lockdown, is an outlier with its refining sector showing signs of recovery amid a decline in the number of new virus cases.
Global oil demand, however, will likely slump 18.7 million barrels per day (bpd) in April, versus a 10.5 million bpd drop in March, Goldman Sachs analysts said. Total annual consumption will drop 4.25 million bpd from 2019 levels, they added.
“Such a collapse in demand will be an unprecedented shock for the global refining system,” the analysts said.
Asia accounts more than 60% of world oil demand growth.
The virus pandemic has roiled financial markets and oil has been hit particularly hard, crashing about 60% so far this year – on track for their biggest quarterly loss ever.
Refiners in Asia are now losing money as domestic demand has dried up with people staying at home and bleak margins making exports not lucrative either.
A complex refinery in Singapore stands to lose nearly $2 for every barrel of crude it processes, including losses of more than $6 a barrel on gasoline production, Reuters calculations show.
To make matters worse, some refiners have been unable to use the downtime for maintenance purposes due to manpower shortage amid virus-linked travel curbs.
“This first quarter would be the worst first quarter we have ever seen as producing oil products was loss-making,” said Cho Sang-bum, an official at the Korea Petroleum Association.
PROFIT WARNINGS
South Korea run rates fell to 82.8% in February, lowest for the month since 2014, and more cuts will come as gasoline and diesel demand are expected to fall 30% on year in March, sources and data from the Korea National Oil Corp show.
Japan too is mulling more cuts after run rates fell nearly 7% for the first 12 weeks in 2020, data from the Petroleum Association of Japan show.
Japan’s top refiner JXTG expects a record net loss of 300 billion yen (2.3 billion pounds) for the year ending March, while Hyundai Oilbank is planning to cut expenses by 70% to help offset the impact of the slump in margins.
In India, refiners are facing a tough cash flow situation, an official at one of the state refiners said.
Their tanks are full, but their retail income has virtually stopped due to weak demand while they continue to make payments for crude imports to avoid default, the official added.
In contrast, China, the world’s No. 2 refining centre, is expected to see its average run rate rise 3% on year to 77% in the second quarter, from 63% in February, said Seng Yick Tee, analyst at Beijing-based consultancy SIA Energy.
Mega refineries are optimising run rates for petrochemical feedstock, while low oil prices, stimulus measures and a rush to replenish stocks for manufactured parts as businesses come back online are spurring demand in China, the analyst added.
Australia’s four refiners said they were watching the situation and would adjust runs. Two of them warned local jet fuel demand was likely to collapse by up to 90% over the time that flight cancellations are in place.
Petron Corp and Shell in the Philippines, Indonesia’s Pertamina and PetroVietnam said their refineries were operating normally.
Source: Reuters (Reporting by Nidhi Verma in New Delhi, Jane Chung in Seoul, Yuka Obayashi in Tokyo, Chayut Setboonsarng in Bangkok, Enrico dela Cruz in Manila, Wilda Asmarini in Jakarta, Khanh Vu in Hanoi, Sonali Paul in Melbourne, Muyu Xu in Beijing, Shu Zhang, Jessica Jaganathan, Roslan Khasawneh, Chen Aizhu and Florence Tan in Singapore; Editing by Himani Sarkar)
Home / Oil & Energy / Oil & Companies News / Global oil refiners to deepen output cuts as virus destroys demand
Oil refiners from Texas to Thailand are bracing for deeper output cuts, bruised by an unprecedented demand shock as more countries lock down and restrict travel to contain the spread of the coronavirus.
In Asia, home to over a third of the global refining capacity, India’s top refiner has slashed output by up to 25%-30% while operators in Japan, South Korea and Thailand – already running at reduced rates – are looking at more cuts even as they shut plants for maintenance.
Several refineries in Europe and the United States have also cut output since last week.
China, which restarted its economy after weeks of lockdown, is an outlier with its refining sector showing signs of recovery amid a decline in the number of new virus cases.
Global oil demand, however, will likely slump 18.7 million barrels per day (bpd) in April, versus a 10.5 million bpd drop in March, Goldman Sachs analysts said. Total annual consumption will drop 4.25 million bpd from 2019 levels, they added.
“Such a collapse in demand will be an unprecedented shock for the global refining system,” the analysts said.
Asia accounts more than 60% of world oil demand growth.
The virus pandemic has roiled financial markets and oil has been hit particularly hard, crashing about 60% so far this year – on track for their biggest quarterly loss ever.
Refiners in Asia are now losing money as domestic demand has dried up with people staying at home and bleak margins making exports not lucrative either.
A complex refinery in Singapore stands to lose nearly $2 for every barrel of crude it processes, including losses of more than $6 a barrel on gasoline production, Reuters calculations show.
To make matters worse, some refiners have been unable to use the downtime for maintenance purposes due to manpower shortage amid virus-linked travel curbs.
“This first quarter would be the worst first quarter we have ever seen as producing oil products was loss-making,” said Cho Sang-bum, an official at the Korea Petroleum Association.
PROFIT WARNINGS
South Korea run rates fell to 82.8% in February, lowest for the month since 2014, and more cuts will come as gasoline and diesel demand are expected to fall 30% on year in March, sources and data from the Korea National Oil Corp show.
Japan too is mulling more cuts after run rates fell nearly 7% for the first 12 weeks in 2020, data from the Petroleum Association of Japan show.
Japan’s top refiner JXTG expects a record net loss of 300 billion yen (2.3 billion pounds) for the year ending March, while Hyundai Oilbank is planning to cut expenses by 70% to help offset the impact of the slump in margins.
In India, refiners are facing a tough cash flow situation, an official at one of the state refiners said.
Their tanks are full, but their retail income has virtually stopped due to weak demand while they continue to make payments for crude imports to avoid default, the official added.
In contrast, China, the world’s No. 2 refining centre, is expected to see its average run rate rise 3% on year to 77% in the second quarter, from 63% in February, said Seng Yick Tee, analyst at Beijing-based consultancy SIA Energy.
Mega refineries are optimising run rates for petrochemical feedstock, while low oil prices, stimulus measures and a rush to replenish stocks for manufactured parts as businesses come back online are spurring demand in China, the analyst added.
Australia’s four refiners said they were watching the situation and would adjust runs. Two of them warned local jet fuel demand was likely to collapse by up to 90% over the time that flight cancellations are in place.
Petron Corp and Shell in the Philippines, Indonesia’s Pertamina and PetroVietnam said their refineries were operating normally.
Source: Reuters (Reporting by Nidhi Verma in New Delhi, Jane Chung in Seoul, Yuka Obayashi in Tokyo, Chayut Setboonsarng in Bangkok, Enrico dela Cruz in Manila, Wilda Asmarini in Jakarta, Khanh Vu in Hanoi, Sonali Paul in Melbourne, Muyu Xu in Beijing, Shu Zhang, Jessica Jaganathan, Roslan Khasawneh, Chen Aizhu and Florence Tan in Singapore; Editing by Himani Sarkar)
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Tiong has been attacking Sinkie refinery prices
New shipping rules, China pummel Asian refinery profits
Clyde Russell
[LAUNCESTON, Australia] Profits at Asian refineries are being buffeted by a combination of factors, chief among them uncertainty over how exactly new shipping fuel standards will play out and the rise of China as a product exporter.
Refinery margins in Asia have been knocked to the lowest since the financial crisis in 2008 by some measures, as the industry grapples with the disparate factors.
The return from processing a barrel of Dubai crude at a typical Singapore refinery was a loss of US$1.19 a barrel in early Asian trade on Monday. This compares with the October average profit of US$4.11 a barrel and the 365-day moving average of US$4.08 a barrel.
Another measure of refinery profits is known as gross refining margins, which measures the incentive a refiner has to process an additional barrel of crude, and not total profit derived from all barrels of oil sent through the plant.
Under this measure, a typical Singapore refinery processing a barrel of Dubai crude is making a loss of US$10.53 a barrel, which is actually slightly worse than the low of US$10.49 seen in July 2008. The gross refining margin has also dropped rapidly, given it was at a profit of US$6.14 a barrel on Sept 23.
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What the numbers show is just how quickly refining margins have collapsed in recent weeks.
Part of the problem is a surge in the availability of gasoil, the fuel used to make diesel and jet kerosene.
Refineries in China are exporting more diesel and jet kerosene, a result of a combination of factors including soft domestic demand growth, the addition of new refining capacity and a desire to use up export quotas prior to the end of the year.
China's exports of diesel jumped 11.5 per cent in the first 10 months of the year, while those for jet kerosene surged 21.5 per cent, according to official figures.
Gasoil exports from Asian producers, including China, are expected to be around 7.5-8.0 million tonnes in November, up from October's 7.3-7.4 million tonnes, according to Refinitiv Oil Research, which tracks tanker movements and port data.
Asian refiners have also been gearing up their output of gasoil, given expectations demand for the fuel will increase once the change in shipping rules, known as IMO 2020, comes into effect in January.
Ships will be banned from using high-sulphur fuel oil and will have to switch to either very low sulphur fuel oil, marine gasoil, or perhaps even liquefied natural gas.
But ship owners also have the option of using devices called scrubbers, which remove sulphur from the exhaust emissions, thereby allowing the continued use of high-sulphur fuel oil.
CLARITY SOUGHT
The problem for the refining industry is there doesn't, as yet, seem to be a clear winner among the various options facing ship owners, making planning for IMO 2020 challenging.
Many in the market expected demand to rise for marine gasoil, but it also seems refiners are being encouraged to produce very low sulphur fuel oil as an alternative.
The uncertainty is weighing on prices, with the profit margin, or crack, for gasoil with 10 parts per million (ppm) in Singapore ending last week at US$13.97 a barrel.
While this was up slightly from the seven-month low of US$13.63 on Nov 21, it's still some 27 per cent below the peak so far in 2019 of US$19.14 from Sept 9.
The crack for benchmark 180-centistoke fuel oil ended last week at a loss of US$23.25 a barrel, slightly better than the lowest on record of a loss of US$25.68 from Nov 14.
As recently as the end of July, the fuel oil crack in Singapore was a profit of US$4.78 a barrel, again showing the rapid loss of profitability as the new rules approach.
There is a chance that fuel oil cracks may recover as the current low prices incentivises ship owners to install scrubbers, rather than switch to cleaner burning fuels.
Overall, refiners probably face a difficult few months ahead as the market works out what exactly the demand for the various fuels for shipping will be.
But more broadly, Asian refiners also face the challenge of structurally higher exports from China given the world's largest crude oil importer now has excess refining capacity and moderating economic growth.
REUTERS
New shipping rules, China pummel Asian refinery profits
Clyde Russell
[LAUNCESTON, Australia] Profits at Asian refineries are being buffeted by a combination of factors, chief among them uncertainty over how exactly new shipping fuel standards will play out and the rise of China as a product exporter.
Refinery margins in Asia have been knocked to the lowest since the financial crisis in 2008 by some measures, as the industry grapples with the disparate factors.
The return from processing a barrel of Dubai crude at a typical Singapore refinery was a loss of US$1.19 a barrel in early Asian trade on Monday. This compares with the October average profit of US$4.11 a barrel and the 365-day moving average of US$4.08 a barrel.
Another measure of refinery profits is known as gross refining margins, which measures the incentive a refiner has to process an additional barrel of crude, and not total profit derived from all barrels of oil sent through the plant.
Under this measure, a typical Singapore refinery processing a barrel of Dubai crude is making a loss of US$10.53 a barrel, which is actually slightly worse than the low of US$10.49 seen in July 2008. The gross refining margin has also dropped rapidly, given it was at a profit of US$6.14 a barrel on Sept 23.
Stay updated with
BT newsletters
What the numbers show is just how quickly refining margins have collapsed in recent weeks.
Part of the problem is a surge in the availability of gasoil, the fuel used to make diesel and jet kerosene.
Refineries in China are exporting more diesel and jet kerosene, a result of a combination of factors including soft domestic demand growth, the addition of new refining capacity and a desire to use up export quotas prior to the end of the year.
China's exports of diesel jumped 11.5 per cent in the first 10 months of the year, while those for jet kerosene surged 21.5 per cent, according to official figures.
Gasoil exports from Asian producers, including China, are expected to be around 7.5-8.0 million tonnes in November, up from October's 7.3-7.4 million tonnes, according to Refinitiv Oil Research, which tracks tanker movements and port data.
Asian refiners have also been gearing up their output of gasoil, given expectations demand for the fuel will increase once the change in shipping rules, known as IMO 2020, comes into effect in January.
Ships will be banned from using high-sulphur fuel oil and will have to switch to either very low sulphur fuel oil, marine gasoil, or perhaps even liquefied natural gas.
But ship owners also have the option of using devices called scrubbers, which remove sulphur from the exhaust emissions, thereby allowing the continued use of high-sulphur fuel oil.
CLARITY SOUGHT
The problem for the refining industry is there doesn't, as yet, seem to be a clear winner among the various options facing ship owners, making planning for IMO 2020 challenging.
Many in the market expected demand to rise for marine gasoil, but it also seems refiners are being encouraged to produce very low sulphur fuel oil as an alternative.
The uncertainty is weighing on prices, with the profit margin, or crack, for gasoil with 10 parts per million (ppm) in Singapore ending last week at US$13.97 a barrel.
While this was up slightly from the seven-month low of US$13.63 on Nov 21, it's still some 27 per cent below the peak so far in 2019 of US$19.14 from Sept 9.
The crack for benchmark 180-centistoke fuel oil ended last week at a loss of US$23.25 a barrel, slightly better than the lowest on record of a loss of US$25.68 from Nov 14.
As recently as the end of July, the fuel oil crack in Singapore was a profit of US$4.78 a barrel, again showing the rapid loss of profitability as the new rules approach.
There is a chance that fuel oil cracks may recover as the current low prices incentivises ship owners to install scrubbers, rather than switch to cleaner burning fuels.
Overall, refiners probably face a difficult few months ahead as the market works out what exactly the demand for the various fuels for shipping will be.
But more broadly, Asian refiners also face the challenge of structurally higher exports from China given the world's largest crude oil importer now has excess refining capacity and moderating economic growth.
REUTERS
It is true man. Now I work from home. Kids dont go to school. We all stay home. We go out once a week to get groceries. Nobody is going on road trips. No drives to ski mountains resorts. No holidays. No flights.
Demand for oil is practically drop at least 60% probably more.
But in sinkieland still driving going to work and Universal Studios and Zoo. So demand for oil still high.
Demand for oil is practically drop at least 60% probably more.
But in sinkieland still driving going to work and Universal Studios and Zoo. So demand for oil still high.
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Jurong Rock Cavern stored expensive oil over $50 a barrel, jialat, stuck with 9,000,000 million barrels inventory,
Now world is flush with cheap oil$20 a barrel, may go back to $10 a barrel... PAP iswaran, ccs panicking
Now world is flush with cheap oil$20 a barrel, may go back to $10 a barrel... PAP iswaran, ccs panicking
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Singapore LNG terminal now losing millions...after being bailed out by PAP government..S IsWaran and Lawless Wong ..baby project
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Clear the oil and we can quarantined all the foreigners down there.
Does this mean SGD$ will collapse? I cant wait.
Does this mean SGD will collapse? I cannot wait for that to happen man. Will be shiok shiok.
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Many Americunts jobless.
sinkie oil will collpase
sinkie oil will collpase
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Tanker owners are having a good time as their ships are used for storage.
Plus those with onshore oil storage facilities are reaping future profits by buying refined petroleum products now cheaply and selling it in future at a higher price.
Current ron 95 in jb is RM1.38 per litre. Too bad there is a lockdown so sinkie can't fill up.
Plus those with onshore oil storage facilities are reaping future profits by buying refined petroleum products now cheaply and selling it in future at a higher price.
Current ron 95 in jb is RM1.38 per litre. Too bad there is a lockdown so sinkie can't fill up.
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The only plus point of the Shell, Jurong Island Refiners is they sell to Sinkapore in SGD, not USD.
so with infinite Printing of SGD, we can buy oil forever free of charge. hehehehe
so with infinite Printing of SGD, we can buy oil forever free of charge. hehehehe
Hope so. Can only buy your own stored oil with that useless valued SGD. Cannot buy food.
Ho say!
Actually not really. Because now oil is so fucking cheap and available and the infrastructure is all built. Plus the world will fuck fuck care about this whole climate change nonsense when they have more important things to worry about like paying rent and buying food.
So oil is back.
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