http://www.reuters.com/article/us-oil-refinery-maintenance-idUSKBN15G55W
Reuters, 2 Feb 2017- Increased refinery maintenance in Asia and the Middle East is expected to boost profits for operators in other regions in the first half of this year, market watchers said on Wednesday.
Refineries worldwide ran hard during the past two years to capitalize on low oil prices, with Chinese refineries processing a record amount of crude in 2016, meaning that some units now have no choice but to carry out maintenance.
Outages in the first half will equate to nearly 1 million barrels per day (bpd) more than in the same period last year, speakers told the Platts Middle Distillates conference in Antwerp.
Though this is likely to help to clear the stocks of oil products such as diesel, gasoline and jet fuel that poured into the world's storage tanks over the past two years of excess, it is also likely to cut into demand for crude oil just as prices recover on the back of production cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
Trading house Gunvor's chief economist, David Fyfe, said that he expects "healthy and robust" refinery margins in the first half of the year.
Gunvor data shows that maintenance in February and March will take close to an additional 1 million bpd offline compared with the same months in 2016.
Both Fyfe and James McCullagh, oil products analyst with Energy Aspects, said the bulk of the work will be concentrated in Asia and the Middle East, offering a reprieve to Europe's comparatively less advanced refineries, which have depended largely on demand -- or supply problems -- in other regions to underpin profits.
Energy Aspects expects Asian refineries alone to account for 900,000 bpd more in offline capacity in April, compared with the prior year, and 250,000 bpd more over first half of 2017. Those shutdowns, paired with diesel stocks in China that it estimates are near record lows, would underpin refinery profits in most regions, he said.
Fires and other issues at refineries worldwide this month suggest that many units are feeling the effects of the ramp-up in output over the past year or two.
"The strong margins have in a way stored up unplanned outages," McCullagh said.
This month's outages included Abu Dhabi National Oil Company's Ruwais refinery, two refineries in West Africa and others in India, Indonesia and Brazil.
S.Korea's S-Oil expects firm refining profits in 2017
http://www.cnbc.com/2017/02/01/reuters-america-update-1-skoreas-s-oil-expects-firm-refining-profits-in-2017.html
SEOUL, Feb 2 (Reuters) - South Korea's S-Oil Corp expects healthy refining profits this year, buoyed by growing demand for oil products in places such as China and Southeast Asia.
The country's third-largest oil refiner said in a quarterly earnings statement on Thursday that global oil demand would grow soundly in 2017, although the rate of increase could ease slightly from last year.
"Healthy margins are expected as 1.32 million barrels per day (bpd) of oil demand growth will outstrip an incremental net capacity increase of 574,000 bpd," the company said, referring to the profit margin on refining barrels of crude oil.
Inventory gains and a recovery in refining margins helped S-Oil, whose top shareholder is Saudi Aramco <IPO-ARMO.SE>, notch up a 444 billion won ($386 million) profit in the last quarter of 2016, compared with a loss of 42.9 billion won the year before.
S-Oil treasurer Shin Kwan-bae said on a call with analysts that the company expected the official selling price (OSP) for Arab Light crude, supplied by Saudi Arabia, to remain steady in Asia from last year.
He said that even if Middle Eastern crude supply drops in the wake of a deal by producers to curb output, Saudi Arabia would not want to harm its market share in Asia by increasing OSPs.
A company official said S-Oil planned to carry out less scheduled maintenances this year, limiting such work to a condensate fractionation unit (CFU) and a No.2 paraxylene unit. He did not give further details.
Industry sources have said S-Oil would shut down its No.1 residue hydro desulphurisation unit (RHDS) and crude oil refining unit in April for about a month.
S-Oil also said on Thursday that its 2018 expansion project was on track to complete in the first half of next year.
Under the project, the company will build a residual fuel oil upgrading system and an olefin production system that will churn out 405,000 tonnes of polypropylene a year, along with other products.
Asian Oil refinery margins jump on outages in Mideast, Asia
http://www.reuters.com/article/us-asia-crude-refineries-idUSKBN151183
Reuters, 17 Jan 2017- Several refineries in the Middle East and Asia have shut down in the past week due to fires and other technical problems, leading to a jump in profit margins for facilities still operating.
The higher Asian refining margins have beat back concerns that profits would fall as crude oil prices gained as the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers began to implement their agreed production cuts from January to reduce global oversupply.
Besides the fires and other shutdowns, maintenance and repairs at refineries in Indonesia by Pertamina [PERTM.UL] and in Singapore by Royal Dutch Shell have further boosted oil product margins.
"Margins will be supported as these outages will affect the ability of the region to stock up before maintenance picks up in March," said Nevyn Nah, a fuel analyst at Energy Aspects in Singapore.
Profits for processing a barrel of Dubai crude at a Singapore refinery jumped to $7.64 a barrel on Jan. 16, the highest since Nov. 30, Reuters data showed.
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