Product Markets and Refinery Operations
OPEC Monthly Oil Market Report – August 2017
The Asian market continued to be bullish in July, due to strengthening in all product crack spreads, with the
exception of the naphtha and fuel oil crack spreads, which declined marginally.
Graph 6 - 5: Singapore crack spread vs. Oman
crack declined compared with June levels, losing around $0.15/b over the month as
the rise in naphtha value didn’t match increased feedstock prices, despite positive factors such as firm
demand. Additional naphtha cracking capacities came out of maintenance and increased demand in Asia, for
example, the 495,000 mt/y Mizushima naphtha cracker in Japan returned from maintenance. A stronger
gasoline market, rising reforming spread and an increase in naphtha imports into China were also positive
factors for the naphtha crack spread in July.
crack spread against Oman crude in Singapore averaged $14.1/b in July, up by $0.9/b
compared with the previous month’s level. The
market continued to strengthen during July,
supported by healthy demand and seasonal growth in Japanese demand. Healthy demand growth in India in
combination with limited supply reduced export levels over the month, further supporting the gasoline crack
middle of the barrel
, the gasoil crack spread exhibited a solid rise, adding $1.9/b compared with June
to reach $13.7/b in July. The additional supply was outweighed by higher regional demand, with Vietnam
absorbing extra volumes in the market due to maintenance at the Dung Quat refinery. Hot weather in Japan
also propelled extra consumption in the power generation sector, with demand increasing to its highest level
since March, based on preliminary data.
bottom of the barrel
, the Asian fuel oil crack spread in Singapore against Oman averaged about
minus $1.5/b in July, declining by $0.3/b from the previous month. The fuel oil market weakened as bunker
demand slowed, overall Asian demand eased from summer peak levels, Singapore fuel oil stocks increased
to a three-month high and increasing arbitrage volumes m-o-m came in from the West.
Sources: Argus Media and OPEC Secretariat.