Page 6 - AfrOil Week 28 2020

AfrOil NEWSBASE GLOBAL ROUNDUP (NRG) AfrOil
NRG: Around the world
Depressed margins, deal-making, marginal fields and the hydrogen revolution are in the spotlight
COMMENTARY
WELCOME to the latest edition of NewsBase’s Roundup Global (NRG), in which our team of international editors provide you with a snap- shot of some of the key issues affecting their regional beats. Get the NRG Oil & Gas Editor’s Pickstoyourinboxeveryweekforfree.Justsign up here.
Topics covered in this week’s NRG include depressed margins, deal-making, marginal elds, the hydrogen revolution, strategic LNG fleet, new discoveries and contracts, restoring pipeline and shale ows and the ups and downs of energy exports. NewsBase’s monitors report on both new developments and continuing coverage of world- wide oil and gas.
Margins press China’s independent re ners
China’s independent re ners are reportedly set to wind down run rates in the third quarter, owing to depressed gross re ning margins (GRMs)
Margins have come under pressure from extensive fuel stockpiles and rising feedstock costs, Bloomberg quoted analysts and unnamed traders as saying last week. Brent is currently trading in a $40-45 per barrel range, a signi - cant improvement on the more than 20-year low recorded a er prices collapsed in early-March. Brent slipped below $16 in April, while West
Texas Intermediate (WTI) even managed to trade – albeit brie y – at negative prices.
Bloomberg noted that China’s independent re neries, or teapots, also had a backlog of crude imports waiting to be processed by the port of QingdaoinShandongProvince,whichishome to the majority of the country’s teapots.
Shandong’s independent plants will cut runs from May highs of 2.3mn barrels per day to 1.9- 2mn bpd in July and August, industry consultant FGE said. Traders told the newswire that some plants in the cities of Dongying and Weifang were likely to lead the charge in ramping down operations.
Energy Aspects analyst Yuntao Liu warned that stronger oil prices had wiped out the ben- e ts re ners received from the central govern- ment’s oil price oor, which was set at $40 in January 2016. e policy was implemented to protect domestic production, following a simi- lar oil price collapse 2014 that sent Brent into a tailspin. Liu added: “[S]ince majors are looking to raise runs a er seasonal maintenance, teapots are facing big challenges.”
While Energy Aspects and FGE use di erent methods of calculating the teapots’ GRMs, both sets of numbers show the independent sector to be under enormous pressure.
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