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The Star
6 days ago
- Business
- The Star
Global oil refiners see short-term boost
LONDON: Refiners across the globe are reaping unexpected profits from producing key fuels in recent weeks, offering an ailing sector respite before an anticipated weakening later this year, as plant closures have tightened fuel supply needed to meet peak summer demand. The strength in fuel markets contrasts with crude oil prices falling to a four-year low in May, after the Organisation of the Petroleum Exporting Countries and its allies (Opec+) unwound output cuts faster than planned. It also suggested demand has so far proved resilient despite ongoing concerns about the impact of tariffs. 'Margins are strong because the balance of products – supply and demand – is still tight,' said Sparta Commodities analyst Neil Crosby. Refining margins reflect the profits a plant makes from processing crude oil into fuels such as petrol or diesel. Just a few months ago, oil majors were warning 2025 would be a bleak year for refining. TotalEnergies and BP reported lower first quarter profits because of weaker earnings from fuels. Refiners have broadly struggled with waning demand from economic slowdowns, an increasing uptake of electric vehicles and competition from newer plants in Asia and Africa. Global composite refining margins reached US$8.37 per barrel in May 2025, according to consultancy Wood Mackenzie, their highest since March 2024, but still much lower than the US$33.50 average in June 2022 during the post-pandemic demand recovery and in the wake of Russia's invasion of Ukraine. Closures in the United States and Europe have slowed global net refinery capacity growth below demand growth, helping to make operational refineries relatively more profitable. Global diesel supply could decline by 100,000 barrels per day (bpd) year-on-year in 2025, while demand will drop 40,000 bpd, according to energy consultancy FGE. Petrol supply will decline by 180,000 bpd, with demand rising by 28,000 bpd. 'We are therefore seeing a tighter product market for key transport fuels, which is exerting upwards pressure on margins, much to the relief and joy of regional refiners,' said FGE's head of refined products Eugene Lindell. Refiners of all fuel-producing configurations are benefitting from current margins, FGE's head of refining Qilin Tam added, as light fuels such as petrol and heavy products like fuel oil have recently increased. In Europe, closures include Petroineos' Grangemouth refinery in Scotland and Shell's Wesseling facility this year, as well as a part closure of BP's Gelsenkirchen refinery. In the United States, LyondellBasell's Houston refinery was shuttered this year, while Phillips 66's Los Angeles refinery and Valero's Benicia refinery are set to close in October 2025 in April 2026, respectively. Unplanned refinery shutdowns have also compounded the impact of closures. A power outage across the Iberian peninsula on April 28 took around 1.5 million bpd of refinery capacity offline, JPMorgan noted, with 400,000 bpd of that still shut in two weeks later. Two of the world's major new refinery projects, Nigeria's giant Dangote refinery, and Mexico's Olmeca refinery, both had unplanned outages on petrol-producing units in April. Fuel inventories at key hubs have declined this year, creating extra demand for refinery production heading into the peak summer season. Stocks in the Organisation for Economic Co-operation and Development region, which includes the United States, the European Union and Singapore, fell by 50 million barrels from January to May, according to JPMorgan analysts. 'This significant reduction in product stocks has underscored the resilience in product prices,' the analysts said. Global fuel demand in the northern hemisphere is highest in summer as motoring and air travel increase. In the Middle East, heavy fuel oil demand peaks in summer to meet cooling demand when temperatures soar. 'Strength in the northern hemisphere summer demand growth is where we see some support to margins,' said Rystad Energy analyst Janiv Shah. US refining executives have been upbeat on demand, while noting relatively low stocks. 'Our current petrol supply outlook is for those inventories to continue to tighten,' Phillips 66 executive vice-president Brian Mandell said on the firm's first quarter earnings call. Marathon Petroleum's domestic and export businesses were seeing steady demand for petrol, and growth for diesel and jet fuel compared to 2024, chief executive officer Maryann Mannen said on its earnings call. However, analysts have warned that the current strength may soon fade as demand is hit by trade wars, and as fuel production rises as plants look to profit from higher margins. 'We have the view that there is a bit of a short-term bump,' Wood Mackenzie analyst Austin Lin said. Global oil demand growth is set to average 650,000 bpd for the remainder of 2025, falling from just short of one million bpd in the first quarter as trade uncertainty weighs on the global economy, according to the International Energy Agency. 'Refiners should be hedging everything now, as I think this is as good as it gets for them,' a veteran oil trader, who asked not to be named, added. — Reuters
Yahoo
03-06-2025
- Business
- Yahoo
Analysis-Global oil refiners see short-term boost from higher margins
By Robert Harvey, Shariq Khan and Nicole Jao LONDON (Reuters) -Refiners across the globe are reaping unexpected profits from producing key fuels in recent weeks, offering an ailing sector respite before an anticipated weakening later this year, as plant closures have tightened fuel supply needed to meet peak summer demand. The strength in fuel markets contrasts with crude oil prices falling to a four-year low in May, after OPEC+ unwound output cuts faster than planned. It also suggests demand has so far proved resilient despite ongoing concerns about the impact of tariffs. "Margins are strong because the balance of products - supply and demand - is still tight," said Sparta Commodities analyst Neil Crosby. Refining margins reflect the profits a plant makes from processing crude oil into fuels such as gasoline or diesel. Just a few months ago, oil majors were warning 2025 would be a bleak year for refining. TotalEnergies and BP reported lower first-quarter profits because of weaker earnings from fuels. Refiners have broadly struggled with waning demand from economic slowdowns, an increasing uptake of electric vehicles, and competition from newer plants in Asia and Africa. Global composite refining margins reached $8.37 per barrel in May 2025, according to consultancy Wood Mackenzie, their highest since March 2024, but still much lower than the $33.50 average in June 2022 during the post-pandemic demand recovery and in the wake of Russia's invasion of Ukraine. Closures in the United States and Europe have slowed global net refinery capacity growth below demand growth, helping to make operational refineries relatively more profitable. Global diesel supply could decline by 100,000 barrels per day (bpd) year-on-year in 2025, while demand will drop 40,000 bpd, according to energy consultancy FGE. Gasoline supply will decline by 180,000 bpd, with demand rising by 28,000 bpd. "We are therefore seeing a tighter product market for key transport fuels which is exerting upwards pressure on margins, much to the relief and joy of regional refiners," said FGE's head of refined products Eugene Lindell. Refiners of all fuel-producing configurations are benefitting from current margins, FGE's head of refining Qilin Tam added, as light fuels such as gasoline and heavy products like fuel oil have recently increased. In Europe, closures include Petroineos' Grangemouth refinery in Scotland and Shell's Wesseling facility this year, as well as a part closure of BP's Gelsenkirchen refinery. In the U.S., LyondellBasell's Houston refinery was shuttered this year, while Phillips 66's Los Angeles refinery and Valero's Benicia refinery are set to close in October 2025 in April 2026 respectively. Unplanned refinery shutdowns have also compounded the impact of closures. A power outage across the Iberian peninsula on April 28 took around 1.5 million bpd of refinery capacity offline, JPMorgan noted, with 400,000 bpd of that still shut in two weeks later. Two of the world's major new refinery projects, Nigeria's giant Dangote refinery, and Mexico's Olmeca refinery, both had unplanned outages on gasoline-producing units in April. TIGHTER BALANCES Fuel inventories at key hubs have declined this year, creating extra demand for refinery production heading into the peak summer season. Stocks in the OECD region, which includes the U.S., EU and Singapore, fell by 50 million barrels over January-May, according to JPMorgan analysts. "This significant reduction in product stocks has underscored the resilience in product prices," the analysts said. Global fuel demand in the northern hemisphere is highest in summer as motoring and air travel increase. In the Middle East, heavy fuel oil demand peaks in summer to meet cooling demand when temperatures soar. "Strength in the northern hemisphere summer demand growth is where we see some support to margins," said Rystad Energy analyst Janiv Shah. U.S. refining executives have been upbeat on demand, while noting relatively low stocks. "Our current gasoline supply outlook is for those inventories to continue to tighten," Phillips 66 executive vice president Brian Mandell said on the firm's first-quarter earnings call. Marathon Petroleum's domestic and export businesses were seeing steady demand for gasoline, and growth for diesel and jet compared to 2024, CEO Maryann Mannen said on its earnings call. However, analysts have warned that the current strength may soon fade as demand is hit by trade wars, and as fuel production rises as plants look to profit from higher margins. "We have the view that there is a bit of a short-term bump," Wood Mackenzie analyst Austin Lin said. Global oil demand growth is set to average 650,000 bpd for the remainder of 2025, falling from just short of 1 million bpd in the first quarter as trade uncertainty weighs on the global economy, according to the International Energy Agency. "Refiners should be hedging everything now, as I think this is as good as it gets for them," a veteran oil trader, who asked not to be named, added. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Indian Express
13-05-2025
- Politics
- Indian Express
Mexican mayoral candidate, 3 others shot dead during live broadcast of campaign rally
In a deadly incident captured live on camera, a mayoral candidate and three other people were gunned down in the Mexican state of Veracruz on Sunday night during a campaign event, the state governor said. The local media identified the slain politician as Yesenia Lara Gutiérrez, who was part of Mexico President Claudia Sheinbaum's Morena party, and was the mayoral candidate of Texistepec. In a video posted online during a Facebook Live broadcast by Yesenia Lara, people were seen running and screaming after gunshots were heard at a procession of motorcycles and supporters carrying Morena flags. The Facebook Live footage, where at least 20 gunshots were heard being fired behind the camera, was still available on Lara's Facebook page the following day. Earlier, the crowd was seen smiling and cheering for Lara as the mayoral candidate greeted the residents while she paraded through the streets of Texistepec, surrounded by supporters. Ningún cargo o puesto vale la vida de una persona. Vamos a dar con los responsables de este cobarde asesinato a la candidata y simpatizantes de morena en Texistepec; 4 personas fallecidas y 3 heridos. He instruido a la @FGE_Veracruz y a seguridad no parar hasta encontrarlos. — Rocío Nahle (@rocionahle) May 12, 2025 Mexican President Claudia Sheinbaum confirmed the attack on Monday and said that she wasn't still aware about the motive. Referring to the June 1 elections, the president said 'We're coordinating, particularly with the Secretary of Security, and with all the support needed during this electoral period from Veracruz and Durango.' The state's attorney general office said that Lara was killed in the shootout along with three other people. Another three people were wounded in the incident. Authorities said that an investigation was ongoing in the matter and promised justice would be served. Veracruz Governor Rocío Nahle in a post on X said, 'No position or office is worth a person's life. We will find those responsible for this cowardly murder of the Morena candidate and supporters in Texistepec.' Attacks on politicians have been more often than not a common sight in Mexico due to violence linked to cartels, corruption and the multibillion-dollar narcotics trade.
Business Times
05-05-2025
- Business
- Business Times
China resumes spot LNG purchases to take advantage of price drop
[SINGAPORE] Chinese firms are purchasing liquefied natural gas (LNG) shipments from the spot market, a reversal of months of relative inactivity from the world's top buyer, after prices slumped to the lowest level in about a year. At least two shipments were procured last week at the US$10 per million British thermal units level, according to traders with knowledge of the matter. More buying may materialise this week if prices remain in this range, the traders added. The move is a u-turn for Chinese LNG buyers, which had reduced imports and resold shipments because expensive gas was not attractive to a weaker domestic market. China was the biggest LNG importer in 2024, but deliveries have slumped about 24 per cent from January to April compared to the same period last year. Consistent purchases by China and others may help slow the recent decline in Asian and European gas prices. Spot benchmarks in both regions have fallen amid fears that the global trade war could result in an economic slowdown. 'Prices at the moment are weak,' FGE chairman Emeritus Fereidun Fesharaki said. 'By the end of this year, prices could go 50 to 60 per cent higher than they are today.' Price sensitive Indian companies have upped procurement, traders added. Indian Oil Corp bought a cargo late last week for June delivery, and Gail is now seeking a shipment in a tender that closes this week, the traders said. BLOOMBERG
Reuters
09-04-2025
- Business
- Reuters
China petchem plants face shutdown as tariffs on US LPG loom
SINGAPORE/NEW DELHI, April 9 (Reuters) - Chinese petrochemical makers that buy $11 billion worth of U.S. liquefied petroleum gas (LPG) annually are poised to cut output or shut for maintenance in coming weeks as Beijing's retaliatory tariffs on U.S. imports drive up costs, industry insiders said. The industry of over 30 propane dehydrogenation (PDH) plants relies heavily on U.S. LPG, or propane, for processing into plastics intermediary propylene. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. Advertisement · Scroll to continue Report This Ad Armaan Ashraf, global head of natural gas liquids at consultancy FGE, said tariffs could force Chinese PDH operators to cut average operating rates by nearly 15 percentage points and curb demand for propane from steam crackers and PDH plants by at least 500,000 metric tons per month. The tit-for-tat trade war that saw China on Wednesday escalate retaliatory duties on U.S. imports to 84% threatens to put a Chinese PDH sector already struggling under thin margins for two years into what an east China-based executive with a major PDH plant called a "harsh winter". The executive, declining to be named due to company policy, expects overall PDH plant utilisation rates to drop below half of total industry capacity as early as May. China's 731,000 bpd-PDH sector operated at nearly 70% of capacity in March, down from a peak of around 85% in 2020, according to industry insiders and FGE, with plants losing an average of 480 yuan ($65.31) per ton in the week of April 6, deepening from the week ago's 384 yuan, LSEG Oil Research analysts said. Last year, China bought a record 17.3 million tons of U.S. propane, or 550,000 barrels per day, 60% of China's total imports of the gas liquid. The trade war during President Donald Trump's first term brought China's LPG imports to a halt for nearly two years, but the industry was much smaller then, and operators used cargoes from the Middle East as replacement. Fuelled by cheap U.S. propane, a by-product of the shale gas boom, PDH plants mushroomed on China's east coast over the past decade, leading to overcapacity amid weakening demand for propylene, said traders and the executive. Prices of U.S. propane for Asian exports, or the Far East Index assessment, fell nearly 30% to $425 per ton this week as traders factored last Friday's retaliatory tariffs by Beijing. In physical shipments, it's unclear whether U.S. suppliers and Chinese buyers can agree to lower prices to absorb the shock. While some buyers may be able to re-negotiate with suppliers if contracts permit, others, with term supply deals, may be forced to resell to other Asian buyers. A growing price gap limits Chinese plants' ability to swap U.S. shipments for rival Middle East barrels that are mostly destined for South Korea and India, traders said. "The market is still in massive shock and confusion, with buyers and sellers struggling to reach a physical deal. The tariffs have thrown the pricing structure out of the balance," said a veteran trader. ($1 = 7.3493 Chinese yuan renminbi)
