Refiners' May crude processing skids to 7-month low
Indian refiners' crude throughput slipped to its lowest level in seven months in May as a raging second wave of coronavirus drove a slump in domestic fuel demand and crude imports, government data showed.
Refiners processed about 4.5 million barrels per day (bpd) or 18.97 million tonnes of oil last month, data from the country's Ministry of Petroleum and Natural Gas showed. That was 7.7% below April levels but still 16% higher than a year earlier.
"We're expecting to see runs dip in June before ramping up towards the end of the year on a combination of seasonal demand strength post-monsoon and recovery from the impact of the second wave of the pandemic," Natixis commodities strategist Joel Hancock said.
The dip in refinery processing comes on the back of a 5.5% slip in India's crude oil imports from April and May's fuel demand in the third biggest oil consumer slumping to its lowest since August last year.
Analysts noted that refiners remain optimistic over a rebound in oil demand as vaccinations have ticked up and COVID-19 cases eased this month.
"We've seen this story play out in the U.S. and the UK, as the virus gets under control and vaccinations go up, you're probably going to have a tremendous amount of pent up demand (in India) that's going to be unleashed onto the market," said Edward Moya, senior market analyst at OANDA.
Indian refiners operated at an average rate of 92.37% of capacity in May, down from April's 96.82%, the government data showed.
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