*Asian Refiners Grappling with Difficult Outlook
A massive reduction in product demand, especially jet fuel, coupled with the increasing supply of crude into the market from OPEC is creating a challenging market environment for Asian refiners. Margins for Asia based refiners have been harder hit than other regions as closed arbs, and increased exports from China and India exacerbated the situation.
*Drop in Distillate and Gasoil Cracks
Asian refining margins for 10 ppm gasoil dropped on Friday, recording their biggest weekly decline in 2-1/2 months, as the region is awash with supplies due to higher exports from India and China amid limited arbitrage opportunities. Refining margins, also known as cracks, for 10 ppm gasoil slipped 42 cents to $5.80 a barrel over Dubai crude during Asian trading hours on Friday. Cracks have fallen 15.5% this week, the steepest weekly decline since May 29, Refinitiv Eikon data showed.
*Still No Break for Libyan Oil
The chairman of the Libyan National Oil Corp (NOC) warned at the weekend that the country could face further risks to its oil exports as the civil war in the country continues. Oil ports are still closed, and exports are halted as disruption from eastern forces have prevented any shipments since January.
*Oil Drained from US Strategic Reserve
Companies who had rented storage space during the oil supply glut in the American Strategic Reserve have started to take back their oil. Reuters is reporting that since Aug. 1, the companies have taken back 2.2 million barrels of oil of the 23 million barrels they agreed to store in the Strategic Petroleum Reserve, or SPR, from April through June. The companies have until March 31, 2021 to take back the oil after renting the space for a small fee.