Profitability: Refining margins jump 24%
Iran’s nuclear programme pushed Arab light prices to a high of $123 per barrel
KARACHI:
Gross refining margins surged 24% on a yearly basis despite global crude oil prices reaching a 10-month high, a constant threat to the industry’s performance.
Spreads of all petroleum products improved except furnace oil as escalating tension over Iran’s nuclear programme pushed Arab light prices to a high of $123 per barrel, according to an Elixir Securities research note.
Higher oil prices are causing weakness in furnace oil demand as price increase lagged crude oil prices, thereby widening its discount to crude oil by $1.25 per barrel to negative $9.84 per barrel.
On the flipside, gasoline spread improved by $1.32 per barrel and turned positive at $1 per barrel.
Lower inventory amid refinery turnaround coupled with expectations of higher demand from upcoming driving season kept gasoline prices afloat, says the note.
Published in The Express Tribune, March 3rd, 2012.
Gross refining margins surged 24% on a yearly basis despite global crude oil prices reaching a 10-month high, a constant threat to the industry’s performance.
Spreads of all petroleum products improved except furnace oil as escalating tension over Iran’s nuclear programme pushed Arab light prices to a high of $123 per barrel, according to an Elixir Securities research note.
Higher oil prices are causing weakness in furnace oil demand as price increase lagged crude oil prices, thereby widening its discount to crude oil by $1.25 per barrel to negative $9.84 per barrel.
On the flipside, gasoline spread improved by $1.32 per barrel and turned positive at $1 per barrel.
Lower inventory amid refinery turnaround coupled with expectations of higher demand from upcoming driving season kept gasoline prices afloat, says the note.
Published in The Express Tribune, March 3rd, 2012.