Singapore refinery crude runs down<\/p>\n
SINGAPORE (Reuter): Singapore oil refiners are reducing
\noperations hoping to reverse losses suffered in the last two
\nweeks but are having to contend with weak product demand in the
\nFar East, industry sources said.<\/p>\n
The reduced runs in Singapore refineries also mean less crude
\noil intake and would be bearish for the crude oil market, crude
\noil traders said on Wednesday.<\/p>\n
Esso Singapore Pte Ltd has decided to reduce runs by about 15
\npercent at its 220,000 barrel-per-day (bpd) refinery immediately
\nand for an indefinite period.<\/p>\n
Shell Eastern Petroleum Pte Ltd said it has scheduled a
\nshutdown of a 100,000 bpd crude distillation unit for two weeks
\nin September for maintenance. A spokesman said the shutdown had
\nnothing to do with poor margins.<\/p>\n
Esso's unplanned throughput cut of some 30,000 bpd means the
\nU.S. oil company would have to divert crude oil bought earlier
\nfor Singapore to affiliates in the region, sell off unwanted
\ncrude and defer further crude purchases, an Asian trader said.<\/p>\n
\"Esso's decision was forced by economics, and is for an
\nindefinite period till the situation improves,\" a trade source
\nsaid. \"If margins don't improve, it may continue with the cut.\"<\/p>\n
Primary refining margins -- taking into account crude cost and
\nthe value of spot refined products -- turned negative in early
\nAugust after slipping for most of July.<\/p>\n
\"Margins fell when crude prices rose, but mainly because
\nproduct prices have dropped faster,\" an oil company trader said.<\/p>\n
Jet fuel and gas oil, which make up most of the refined
\nproduct yield, are at their lowest levels since August 1994.<\/p>\n
\"Most products are doing badly, demand is very bad,\" a senior
\noil executive said. \"Singapore refiners are having tank-top
\nproblems for jet kerosene and gas oil.\"<\/p>\n
The primary refining margin for a cargo of Middle East Dubai
\ncrude would be a loss of US$0.30 a barrel, compared to a profit
\nof around 60 cents four weeks ago.<\/p>\n
Refining a cargo of Malaysian Tapis crude would yield a loss
\nof 50 cents compared to a 60 cent profit four weeks ago.<\/p>\n
It would take a while to draw down high product stocks but the
\nsources said they are hoping Esso and Shell's reduced operations
\nwould tighten product supplies in the region.<\/p>\n
Also, they said gas oil from Europe had not been heading for
\nthe Far East due to lower prices here, whereas such movements in
\nthe past had increased competition for Asian markets and helped
\ndepress prices.<\/p>\n
\"The crude units' shutdown will reduce supplies but it is
\ndifficult to forecast what the impact on margins will be,\" the
\nShell spokesman said.<\/p>\n
Although oil traders are hopeful of product demand picking up
\nin the fourth quarter for the Northern Hemisphere winter demand,
\nbearish sentiment prevails.<\/p>\n
\"With falling crude prices, sentiment has been affected, and
\nproduct prices could fall faster,\" another oil company trader
\nsaid.<\/p>\n
\"More North Sea crude is coming out with new production, and
\nOPEC ministers would surely clamour for market share in their
\nNovember meeting. All this would be bearish,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/singapore-refinery-crude-runs-down-1447893297",
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