Soft refining margins may cut Asian crude demand
By ERIC YEP
Asia's crude-oil market is likely to be balanced in the coming week as more regional refineries restart after maintenance, but weaker refining margins may limit refiners' appetite for processing more crude, traders said.
Singapore's complex cracking margins have softened to around $3.53/bbl, from around $6.34/bbl a week earlier, data from JBC Energy showed, as margins for gasoil and kerosene fall from seasonal highs.
Earlier this week, Dubai set the official selling price for its October crude at parity to the Oman selling price, 5 cents narrower than the previous month.
The spread between September Brent crude oil and Dubai crude remains wide at around $4.18/bbl, helping boost demand for barrels priced on the Asian benchmark.
A number of disruptions on the supply side are boosting crude prices.
Iraqi southern crude exports could fall by as much as 500,000 bpd in September due to maintenance and rehabilitation work at the South Oil Co. terminal, JBC Energy said.
"If confirmed, exports of Basrah Light will fall below 2 million barrels a day for the first time since April 2012. This comes at a time when exports from Iraq are already sliding," JBC said.
It said disruptions at Libyan oil production and export facilities have resulted in the loss of 150,000 bpd of production, bringing output to 1.05 million bpd in July.
Additionally crude output from South Sudan may also be hit as a border dispute with its neighbour Sudan threatens to escalate. South Sudan produced 75,000 bpd of crude oil in June and was expected to raise output to 200,000 bpd by year-end.
"If disruptions in Libya and South Sudan persist, this will result in a redrawing of their contributions to the supply-side of the global oil balance not only for this year but also for next year," Deutsche Bank Securities said in a note.
Dow Jones Newswires
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