Product Markets and Refinery Operations
OPEC Monthly Oil Market Report – November 2017
US, refinery utilization
rates have been on
the rebound after the plunge observed last month
caused by hurricane disruptions. In early October,
refinery run recovery experienced a slowdown
caused by a slight drop in refinery intake as two
refineries were shut down prior to tropical storm
Nate to prevent damage. A reduction in scheduled
maintenance work on US refineries in October
supported throughput, as 41% of crude that was
offline in September was recovered. Refinery
corresponding to 16.2 mb/d, 3.1% higher compared
to the previous month, and 2.1% higher y-o-y.
European refinery utilization
89.9% in October, corresponding to a throughput of
10.4 mb/d, a drop of 2.8% compared to a month
earlier, down by a slight 1.0% y-o-y. The decline in
utilization rates came on the back of seasonal
maintenance, as a significant total of 2.2 mb/d of
refinery crude intake was projected to be offline in
Graph 6 - 2:Refinery utilization rates
Asia, refinery runs
in Japan in October averaged 81.7%, a decline of 8.7% compared to a month earlier
and an increase by 5.7% y-o-y. Meanwhile, in China, refinery utilization rates averaged 86.8% in October,
down by 6.8% m-o-m, and a drop of 1.8% y-o-y. The decline of refinery rates in Asia is due to continuing
significant maintenance previously scheduled for October. Despite a decline compared to the 5-year record
high refinery utilization observed in China last month, owed to Petrochina’s Yunnan 260 tb/d refinery start-up,
higher throughputs are expected in the coming months as the CNOOC Huizhou 200 tb/d refinery begins full
operation and refinery maintenance season comes to an end.
US product markets
weakened in October,
despite receiving support on the back of strong
product demand from the middle of the barrel.
Lower product stock levels and refinery
maintenance provided further support.
Jet/kerosene crack spreads
in October dropped
by $5.7/b m-o-m to average $18.49/b, but exhibited
a $7.2/b improvement over the previous year.
Gasoil crack spreads
averaged $14.53/b, down by
$2.1/b m-o-m, but showed a $5.13/b improvement
compared to a year earlier, on strong support from
fuel oil market
in the US weakened, as
tightening market sentiment amid low stock levels
on the back of high net exports was offset by higher
domestic supplies. US fuel oil cracks dipped by
$2.7/b over the previous month to average minus
Graph 6 - 3: US Gulf crack spread vs. WTI
$4.0/b and improved $5.13/b y-o-y.
Sources: EIA, Euroilstock, PAJ, Argus Media
Sources: Argus Media and OPEC Secretariat.