MRC -- The profit for turning a barrel of crude oil into refined fuels in Asia has slipped to the lowest in three months, even though the margin on diesel remains elevated, said Reuters.
The profit, or crack, on making products at a typical Singapore refinery from Dubai crude fell to $4.07 a barrel on Monday, the lowest since July 10 and down 74% from the recent high of $15.40 on Aug. 28.
The decline has been driven by weakness in producing fuels such as gasoline and naphtha, even as the margin on middle distillates has performed strongly.
The trend for refining in Asia is increasingly characterised by strong margins for middle distillates, which are enough to offset weakness in gasoline and even losses for naphtha. This is being driven by a variety of factors, most of which are beyond the control of the refiners.
These include output cuts by the OPEC+ group of exporters, and especially the extra 1 million barrels per day reduction by the group's de facto leader, Saudi Arabia.
We remind, Russia, a leading global oil producer, has cemented its energy ties with China, the world's No. 2 oil consumer after the United States. Beijing has rejected Western criticism of its growing partnership with Moscow in light of Russia's conflict in Ukraine. It insists the ties do not flout international norms, and China has the prerogative to collaborate with whichever country it chooses.