08 Jun 2020 | 19:17 UTC — new york
REFINERY MARGIN TRACKER: Singapore margins suffer as China ramps up crude purchases
Highlights
China buying long-haul crude ahead of expected demand return
Cheaper alternatives available from US, S America, West Africa
new york — Singapore refining margins sank lower last week ahead of stronger China crude demand, an analysis from S&P Platts Global showed June 8.
Singapore cracking margins for regional benchmark Dubai averaged minus $3.89/b for the week ended June 5, down from minus $3.03/b the week prior, according to S&P Global Platts Analytics data. The drop comes despite a week on week drawdown in regional refined product inventories.
Because margins remain weak the world over, many refiners have looked to inventories as a proxy for any recovery in demand.
While Singapore light distillate stocks continued to rise last week, middle distillate stocks -- which include ULSD and jet -- dropped to 300,000 barrels to 14.6 million barrels last week, IE Singapore data showed.
China, largely expected to boost runs in July and August, has begun buying crude in earnest.
China's crude oil imports surged to a record high in May, up 19.2% on the year to 11.34 million b/d, preliminary China's General Administration of Customs data released June 7 showed (See story, 0644 GMT).
Much of the crude China bought in March and April went into storage, but prompt Dubai has since moved into backwardation. This has incentivized refiners to use the crude at hand and replace it with cheaper barrels of crudes from the US, South America and West Africa, rather than from typical suppliers from the Middle East and Russia.
Chinese refiners "need to purchase long-haul cargoes now as incremental supply from the Middle East is not likely to be available," according to Platts Analytics.
Nevertheless, China has plenty of crude on hand. As of June 8, 38.1 million barrels of crude was shown to be in floating crude storage off the coast of China, above the four-week average of 26.6 million barrels, according to Kpler commodity tracking data.
US Atlantic Coast Refining Margin Averages ($/b)
Bonny Light Cracking
Arab Light Cracking
Bakken Crude Cracking
Forties Cracking
Week ending June 05
0.97
0.27
0.34
1.63
Week ending May 29
1.42
1.36
-0.65
1.59
Q2 to date
2.61
5.17
0.93
2.98
Q2-19
7.33
5.20
14.28
7.57
Q1-20
2.56
2.12
8.10
2.86
Q4-19
7.06
2.57
13.13
5.23
Source: S&P Global Platts Analytics
US Gulf Coast Refining Margin Averages ($/b)
Arab Light Cracking
Basrah Light Coking
LLS Cracking
Mars Coking
Week ending June 05
-0.33
-2.93
1.56
0.47
Week ending May 29
0.91
-1.35
1.18
0.56
Q2 to date
3.66
-1.91
3.38
2.14
Q2-19
4.82
3.73
9.82
8.17
Q1-20
3.05
0.96
8.31
7.17
Q4-19
3.78
3.65
10.99
9.30
Source: S&P Global Platts Analytics
US Midwest Refining Margin Averages ($/b)
Bakken Cracking
WTI Cushing Cracking
Syncrude Cracking
WCS ex-Cushing Coking
Week ending June 05
4.20
2.21
3.77
2.54
Week ending May 29
2.07
1.04
2.95
0.54
Q2 to date
1.96
2.28
1.89
1.28
Q2-19
18.58
16.95
17.68
17.35
Q1-20
9.27
6.79
7.53
8.02
Q4-19
12.32
11.19
12.04
12.21
Source: S&P Global Platts Analytics
US West Coast Refining Margin Averages ($/b)
ANS Cracking
Vasconia Coking
Arab Medium Coking
Napo Coking
Week ending June 05
8.95
12.22
8.35
11.95
Week ending May 29
9.73
14.56
11.08
14.19
Q2 to date
8.16
5.18
9.01
7.43
Q2-19
18.32
23.03
17.45
21.22
Q1-20
14.28
14.19
14.46
16.12
Q4-19
17.62
22.22
18.88
20.59
Source: S&P Global Platts Analytics
Singapore Refining Margin Averages ($/b)
Dubai Cracking
Arab Light Cracking
ESPO Cracking
Arab Light Coking
Week ending June 05
-3.89
2.38
-4.78
2.24
Week ending May 29
-3.03
4.73
-5.34
4.87
Q1 to date
-2.56
2.74
-3.68
2.56
Q2-19
0.65
-0.89
0.38
-1.03
Q1-20
-0.93
-3.86
0.09
-3.20
Q4-19
-0.38
-2.45
1.02
-0.32
Source: S&P Global Platts Analytics
ARA Refining Margin Averages ($/b)
WTI MEH Cracking
Bonny Light Cracking
Arab Light Cracking
Urals Cracking
Week ending June 05
-2.14
-0.80
-0.28
-2.74
Week ending May 29
-2.90
-0.01
7.12
-1.48
Q2 to date
-2.00
0.94
5.68
0.92
Q2-19
6.99
6.21
5.05
5.97
Q1-20
1.26
2.36
3.23
5.28
Q4-19
5.96
6.32
3.94
5.89
Source: S&P Global Platts Analytics
Italy Refining Margin Averages ($/b)
Urals Cracking
CPC Blend Cracking
Arab Light Cracking
WTI MEH Cracking
Week ending June 05
-3.97
-0.92
-0.80
-2.99
Week ending May 29
-2.90
1.00
6.17
-4.15
Q2 to date
-1.24
3.46
3.15
-4.18
Q2-19
3.90
6.49
3.22
5.25
Q1-20
4.40
6.00
1.92
0.03
Q4-19
3.76
7.13
2.17
4.39
Source: S&P Global Platts Analytics