Product Markets and Refinery Operations
OPEC Monthly Oil Market Report – September 2017
The Asian market continued its upward trend in August, and was also affected by disruption of supply from
the USGC, resulting in growth in all product crack spreads, with the exception of fuel oil, which declined
Graph 6 - 5: Singapore crack spread vs. Oman
crack inched up compared with July levels to gain around $1.92/b over the month,
moving the crack spread into positive territory for the first time since February 2017. The crack spread
against Oman crude in Singapore averaged $0.21/b in August. Product fundamentals were solid in August,
with strong gasoline prices supporting reforming spreads and healthy petrochemical demand in the region.
Additionally, scheduled refinery maintenance will affect 0.3 mb/d from MRPL, India’s Mangalore refinery,
which is a key naphtha exporting refinery in the region. Formosa Petrochemical’s planned shutdown of its
2 million tons yearly (mty) is projected to last until the end of September, pressuring the crack spread going
gasoline 95 RON
crack spread against Oman crude in Singapore averaged $17.1/b in August, up
by a healthy $3.0/b compared with the previous month’s level. The
market continued to strengthen
during August, supported by healthy overall demand in the region and exacerbated by refinery outages on
the USGC, which opened up arbitrage opportunities to the US. Additionally, fire at Petrochina’s 0.4 mb/d
Dalian refinery further tightened supply in the region, thus supporting the crack spread.
middle of the barrel
crack spread witnessed some gains, adding around $0.1/b
compared with July to reach $13.9/b in August. In the first half of August, the product exhibited a downward
trend on the back of a heavy monsoon season in India, halting diesel requirements and unworkable arbitrage
to Europe. However, towards the end of the month, the gasoil crack spread received support from supply
outages on the US Gulf Coast as product prices increased. The
crack spread also experienced
upward momentum in tandem with gasoil, increasing by $0.6/b compared with July to reach $12.74/b in
August, supported by high global demand and outages from the US Gulf Coast.
bottom of the barrel
, the Asian
fuel oil 180 cst
crack spread in Singapore against Oman averaged
about minus $3.2/b in August, shedding around $1.7/b of its previous month’s value. The fuel oil
weakened as stocks in Singapore rose on the back of rising volumes from the US prior to Hurricane Harvey
and power sector demand from South Korea and Japan waned.
Sources: Argus Media and OPEC Secretariat.