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Product Markets and Refinery Operations

OPEC Monthly Oil Market Report – October 2017

61

European

refinery utilization rates increased from 90.72% in August to 91.00% in September, corresponding

to throughput of 10.5 mb/d.

In

Asia,

Japan refinery utilization dropped by 5.6 pp from 95.75% to 90.13%, corresponding to refinery runs

of 3.17 mb/d. Singapore refinery runs increased by 2 pp to 90.1%. Overall, the Asian market remained

almost flat, despite product export opportunities to Europe being offset by refinery maintenance.

Product markets

US market

Although

crack spreads

at the beginning of the month reached their highest value since 4Q16, they

immediately fell as USGC refineries resumed operations.

Product markets over the month showed healthy levels, which started to retreat to pre-Hurricane levels

towards the end of the month. The impact of the Hurricane was minimal due to the availability of product

supplied on open arbitrage mainly from Europe. Furthermore, crude oil refinery input was able to recover

quickly as crude stock levels were about 60% higher than available when hurricanes Katrina and Gustav hit

the USGC back in 2005 and 2008, respectively; a safety cushion had been provided for additional response

time. With Hurricane Harvey, USGC refineries were able to restarted much sooner.

Gasoline crack spreads

reached their highest

value since 4Q16 at the beginning of the month,

with daily cracks soaring to almost $50/b on 1

September. However, cracks quickly fell when

USGC refinery intake resumed, to average around

$34/b for the month. September premium gasoline

prices in the US increased by 7% from $76.43/b to

$84.54/b.

From a wider perspective, gasoline cracks showed

gradual improvement during the most recent driving

season and continuing into in September.

The

middle distillate

crack spread gained strength

in September as jet fuel and diesel demand were

strong, and higher exports and inventory

drawdowns were seen during the last weeks of the

month. Since June 2017, the gap between diesel

and jet/kerosene crack spreads has been gradually

widening.

Graph 6 - 3:US Gulf crack spread vs. WTI

Fuel oil

cracks also positively contributed to overall product cracks, compared with last month, as the market

tightened on overall low stocks.

-20

-10

0

10

20

30

40

50

-20

-10

0

10

20

30

40

50

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

US$/b

US$/b

Premium gasoline

Jet/Kerosene

Diesel

Fuel oil

Sources: Argus Media and OPEC Secretariat.