Product Markets and Refinery Operations
OPEC Monthly Oil Market Report – August 2017
Product markets in
exhibited mixed performance in July; while middle distillate crack spreads were
strengthening, those for gasoline and fuel oil were weakening.
Graph 6 - 4: Rotterdam crack spread vs. Brent
The light distillate
crack increased against Brent by $0.5/b to reach minus $1.22/b. The increase in
July mainly reflects an improvement in overall demand for the product, as naphtha crackers returned from
maintenance and export opportunities to the Asia Pacific region inched up above June levels.
crack spread against Brent saw a drop of more than $4 from the previous month to average
around $17.4/b. The
market continued weakening in July as regional oversupply outweighed
seasonal demand, increased feed stock costs m-o-m and closed arbitrage to the US, thus reducing export
crack spread against Brent crude at Rotterdam averaged around $12.3/b in July,
adding more than $1.7 versus the previous month’s level. The gasoil market withstood higher feedstock
costs m-o-m due to solid domestic demand, especially in Russia, and refinery outages, which rose towards
the end of the month. This kept the county’s exports low for several months.
bottom of the barrel
, the NWE fuel oil crack lost almost $0.8 compared with the previous month to
average around minus $3.5/b in July. The decline is a result of slower domestic demand and easing export
volumes to Asia. Both of these factors added to a reported accumulation of Amsterdam-Rotterdam-Antwerp
(ARA) inventories to their highest levels since April. The crack is anticipated to continue to decline further as
a result of slower global demand.
Sources: Argus Media and OPEC Secretariat.