Page 34 - Policy_Economic_Report_September2020

Policy and Economic Report:
Oil & Gas Market

Global Petroleum Product Prices

In Asia refinery margin declined in August despite to the smallest extent compared with other region, and
losing the recovery made in July 2020. Weakness came from the middle of the barrel amid a continued
shortfall in gasoil consumption due to covid restrictions. Refinery margins for Oman in Asia gained 39 ȼ on
m-o-m to average minus 87 ȼ /b in August and were lower by $3.03 on y-o-y basis. Refinery utilization
rates in July averaged 86.04 % in selected Asian markets comprising of Japan, China, India and Singapore.

Asian gasoline 92 cracks spreads against Dubai strengthened due to the pick-up in demand from China as
consumptions recovered from the decline witnessed in July 2020. Singapore Gasoline cracks averaged
$3.07/b against Oman in August, up by $1.52 m-o-m, but lower by $4.60 y-o-y.

Jet/kerosene cracks spread against the Oman lost the gains made in the previous month as the limited air
travel activities further weakened the demand. The Singapore jet/kerosene crack spread against Oman
averaged minus 61 ȼ /b, down by $1.34 m-o-m and $16.30 y-o-y.

The Singapore gasoil crack spread weakened as gasoil inventories in Asia’s oil trading hub reached a record
high due to higher output by key players India and South Korea with an increase by 37% and 22%.
Singapore gasoil crack spread against Oman averaged $4.21/b, down by $2.42 m-o-m and by $11.99 y-o-
y.

The Singapore fuel oil crack spread increased, supported by healthy container ship trading activity in the
region amid the declining supply as refineries continued to convert more high sulphur fuel oil barrels into
very low sulphur fuel oil. Singapore fuel oil cracks against Oman averaged minus $2.68, up by $2.68 m-
o-m and $1.76 y-o-y.

MoM % change in cracks spread
100.0%

52.3%
50.0%

0.0%

-24.2%
-50.0%
-40.3%

-100.0%

-150.0% -131.8%
Gasoline Jet/Kerosene Gasoil/Diesel Fuel oil

Source: OPEC monthly report

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September 2020