FGE - Weekly Oil Market and Refining Update - 27 June

Weekly Oil Market & Refining Update
If we don’t see Product Stockbuilds soon, the World is

Short Refining Capacity
Short-Term Global Oil Service 27 June 2022
Highlights
•  Crude: Prices inch up on supply outages; G7 mulls price cap on Russian oil
•  Refining Developments: Al Zour only expected to start up in 4Q with ability to supply ULSD expected in 2023
•  Refining Margins: If we don’t see product stockbuilds soon, the world is short refining capacity
•  Naphtha: Cracks post a strong rebound but remain structurally weak
•  Gasoline: Biden Administration calls for federal gas tax holiday
•  Middle Distillates: Stockbuild needed to calm runaway cracks
•  Fuel Oil: RAPID residue likely to end up in Atlantic Basin
•  Benchmark Refinery Margins
Crude: Prices inch up on supply outages; G7 mulls price cap on Russian oil
Recession fears have swept paper crude markets since the US Federal Reserve’s bigger-than-expected interest rate hike last
Wednesday (15 June). This resulted in Platts Dated Brent plunging to $116.6/bbl on 22 June, down from a three-month high
of $132.1/bbl on 14 June.
Predominantly bearish supply fundamentals added to downward pressure on crude prices last week. Chief among them was
news that Libya’s production had ramped up to 800 kb/d as of last week, up from about 500 kb/d in recent weeks (see FGE -
Weekly Fundamentals - Recession fears are here to stay but short-term risk skewed to the upside - 23 June 2022).
Crude prices recovered from some of the losses towards at the end of last week, partly supported by production shut-ins in
Ecuador. Civilian protests have affected oil facilities, resulting in crude output falling by about 230 kb/d to 275 kb/d late last
week. Yesterday Ecuador’s Ministry of Energy and Mines said that the country’s production could be fully halted within 48
hours if the protests and road blockades continue.
 Benchmark Crude Prices, Weekly Averages,  Benchmark Crude Diffs, Weekly Averages,
$/bbl $/bbl
Although mounting recession fears could further depress prices in the near term, physical crude markets in Europe remain
extremely tight, as indicated by the steep backwardation in Brent CFDs and West African crude diffs.
www.fgenergy.com Page 1 of 16
FGE - Weekly Oil Market & Refining Update 27 June 2022
 Brent CFD Curves, Weekly Averages, $/bbl  Selected West African Spreads vs Brent, $/bbl
Crude prices are seeing further gains today amid tight physical markets in Europe, production outages in Ecuador, and ongoing
political unrest in Libya.
ICE Brent early today was trading at $114.6/bbl, about $1.9/bbl higher than Friday’s close.
Libya’s NOC said today that exports may be suspended from Es Sider and Ras Lanuf in the next few days, due to escalating
protests. Trade data indicate that exports from the ports have been completely halted since 20 June; in comparison typical
export levels from both ports are around 400 kb/d (combined). If exports from the two terminals are halted Libya could face
further production shut-ins. Current production is seen at around 800 kb/d, down from around 1.1 mmb/d in 1Q 2022.
Further supporting crude prices today were reports that G7 leaders meeting in Germany (26-28 June) are considering imposing
a price cap on Russian oil, aiming to reduce Russia’s oil revenues but not remove Russian oil from the market. The oil price
cap would be implemented through a requirement that shippers and insurers only agree to handle Russian oil if the price cap
is observed.
However, the coordinated EU/UK shipping insurance (and re-insurance) ban prohibits EU/UK based insurance companies from
providing their services to ships carrying Russian crude and oil products anyway; so a price cap may have a limited effect
unless it is adopted by all countries, globally.
While it is obvious that Russian shippers will not implement any price cap, it is possible that Asian buyers of Russian crude
(most significantly India and China) might be more willing to cooperate. For Asian buyers the prospect of cheap crude will be
a clear incentive to adopt price cap guidelines. However, there is a risk that Russia could retaliate by cutting supply (for both
oil and gas) pushing prices higher and creating more market instability; the very thing that the G7 is trying to avoid.
Outlook: Long-dated ICE Brent (M1/M36) structure fell from $41/bbl to around $31/bbl last week; this is now a fairly close
reflection of current inventory levels, creating a floor for market structure. With physical markets still looking extremely tight
until August, oil stocks still at very low levels, and significant supply outages (Libya), the price outlook in the next 4-5 weeks is
heavily skewed to the upside. Beyond August, stock trends point to further easing of backwardation and therefore further
reductions in price. If recession fears continue to mount, this could provide further momentum to downwards price movements
and we could even see the market looking oversold relative to stocks later this year.
Refining Developments: Al Zour only expected to start up in 4Q with ability

to supply ULSD expected in 2023
East of Suez
•  With renewed reports that Kuwait’s new 615 kb/d Al-Zour refinery is due online ‘imminently,’ we can confirm that,
although test runs are ongoing at the first of three 205 kb/d CDUs there, the refinery will not operate commercially for
several months yet. Our base case continues to be 4Q 2022 as the refinery’s earliest start date. Moreover, we
understand that Al-Zour will be constrained in its ability to produce 10ppm diesel in the immediate short term. At full
production capacity, the refinery should produce between 110-130 kb/d of gasoil/diesel.
•  Sinopec Shanghai Petrochemical Co will keep its 320 kb/d refinery and cracker unit offline for the time being, as it
undergoes further safety-testing following a fire that broke out on 18 June.
West of Suez
•  Two Ukrainian drone attacks on 22 June caused a fire at Russia’s 100 kb/d Novoshakhtinsk refinery at Rostov-on-
Don, close to the border with Ukraine. The fire was extinguished within 90 minutes, according to the Rostov region's
emergency situations ministry.
•  LyondellBasell has again shut down a coker at its Houston refinery to fix a leak following an attempted restart last
week. The 57 kb/d coker was damaged by a fire on 14 June. If LB fail to find a buyer for the 264 kb/d refinery, the
complex is slated for closure by end-2023.
•  Austria’s OMV said on 24 June that its 200 kb/d Schwechat refinery near Vienna should be fully operational by mid-
3Q following an explosion at its main CDU which has cut runs there by 80%.
•  Curacao’s state-owned RdK is negotiating a 30 year lease (with option to extend for 10 years) for the Isla refinery and
associated Bullenbay terminal with US-Brazilian consortium Caribbean Petroleum. RdK said it wants to finalise a deal
for the mothballed refinery by the start of September.
•  Jamaica-based West Indies Petroleum Ltd. (WIPL) has blamed unspecified “legal issues” for its exit from a deal to
take over operatorship of the shuttered St Croix refinery on the US Virgin Islands. In December 2021 WIPL and Port
Hamilton Refining and Transportation were awarded a contract to operate the refinery..
Refining Margins: If we don’t see product stockbuilds soon, the world is

short refining capacity
On an average weekly basis, global refinery margins surged higher striking fresh record highs in most setups. Cracks surged
across the barrel and across the global regions. Conversion margins in particular posted strong gains, buoyed by a rare
combination of extremely strong gasoline, diesel, and jet cracks. Cracks for the products at the top and bottom of the barrel
also posted gains, particularly on the sweet side, aided by booming VLSFO cracks. But HSFO cracks also posted a moderate
gain, paving the way for stronger hydroskimming margins. To cap the bullish picture for refiners, even US RINs posted a slight
w-o-w decrease, narrowing the impact of RINs on US margins by around $0.40/bbl.
A good portion of the gain came from weaker crude prices which on a weekly average basis fell by almost $8/bbl w-o-w. This
translated into gains for HSFO and naphtha cracks, which are inversely correlated to crude outright prices.
We are currently at a watershed moment as to the direction of cracks from here on and we are tracking onshore product stock
levels very closely. The unprecedented strength in refining margins combined with a seasonal peak in crude runs needs to
translate into significantly higher stocks, particularly for middle distillates as builds in gasoline should be partly offset by
increased seasonal demand. A strong build in global onshore product stocks would calm runaway cracks and temper the
extreme backwardation which at current levels is negatively impacting storage economics.
However, the opposite is the case as well: failure to build stocks more meaningfully would be a strong signal that the world
does not have enough spare capacity, even with Russian clean products flowing largely normally. Indeed, basis preliminary
data from Vortexa, Russian diesel loadings in June are only below average 2021 levels by around 100 kb/d. If we are already
short refining capacity, what happens if some Russian diesel fails to find a home once it is backed out of Europe – something
that will occur at the very latest by 05 February 2023? The answer is as simple as it is brutal: prices would rise so high until
demand weakens enough to rebalance with supply.
 Global Refinery Margins (week avg), $/bbl  Onshore Middle Distillate Stocks, mmb
 Benchmark Refinery Margins**
Weekly Averages (w/e) w-o-w Monthly Averages (f'cast)

$/bbl 17-Jun-22 24-Jun-22 Change Jun-22 Jul-22 Aug-22
Northwest Europe
Brent Hydroskimming 17.43 22.67 5.24 16.17 15.46 11.85
Brent FCC 24.28 29.90 5.62 23.72 20.82 16.84
Mediterranean
Urals Hydroskimming 37.51 42.48 4.97 34.50 36.78 34.88
Urals FCC 48.98 54.21 5.22 46.58 46.15 43.11
US Gulf Coast
LLS FCC 45.39 48.30 2.91 40.61 36.19 31.43
Mars Coking 45.10 47.40 2.30 36.06 32.17 29.37
Singapore
Dubai Hydroskimming 11.08 15.54 4.46 5.75 6.32 7.15
Dubai FCC 18.43 23.42 4.99 13.34 11.95 11.59
Dubai HDC 24.69 29.94 5.26 19.33 15.82 15.10
Dubai RFCC 26.21 32.00 5.79 21.19 16.26 15.15
 US RINs Costs & Impact on Refinery Margins**
Weekly Averages (w/e) w-o-w Historical Monthly Average

$/bbl 17-Jun-22 24-Jun-22 Change May-22 Apr-22 Mar-22
US RINs
Gasoline 5.71 5.32 -0.39 6.27 5.68 4.91
Diesel 10.19 9.55 -0.64 9.58 13.69 9.20
Refinery Margin Impact+ 5.74 5.37 -0.37 5.82 6.77 5.07
+ based on average US refinery yield
Source: FGE
 Global Refinery Runs Outlook
mmb/d Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22
Africa 1.7 1.8 1.7 1.6 1.6 1.7 1.6 1.7 1.6
Asia Pacific 30.0 30.1 29.8 28.5 28.5 28.7 29.8 30.4 30.3
China 14.1 14.0 13.8 12.6 12.8 13.2 13.6 14.0 14.2
Rest of Asia 16.0 16.2 16.0 15.8 15.7 15.6 16.2 16.5 16.0
Europe 11.4 11.5 11.0 11.8 11.8 11.8 12.0 12.3 11.9
FSU 7.0 6.9 6.3 5.9 5.8 6.0 6.1 6.1 5.7
Latin America 4.4 4.5 4.5 4.6 4.5 4.5 4.5 4.6 4.5
Middle East 8.7 8.5 8.6 8.8 8.9 8.9 9.2 9.4 9.2
North America 17.2 17.1 17.6 17.2 17.6 18.2 18.2 18.3 17.8
Total 80.4 80.5 79.5 78.3 78.6 79.8 81.5 82.7 81.0
mmb/d y-o-y Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22
Africa -0.1 0.1 0.1 0.0 -0.1 -0.0 0.1 0.0 -0.0
Asia Pacific 0.1 1.0 0.7 -0.7 -0.2 -0.6 1.2 1.9 2.0
China -0.2 -0.2 -0.3 -1.5 -1.5 -1.7 -0.3 0.2 0.6
Rest of Asia 0.3 1.2 1.0 0.8 1.3 1.1 1.5 1.7 1.4
Europe 1.0 1.1 0.5 0.9 0.8 0.9 0.6 0.5 0.3
FSU 0.7 0.2 -0.5 -0.9 -0.7 -0.7 -0.7 -1.0 -1.1
Latin America 0.2 0.2 0.2 0.8 0.4 0.3 0.3 0.4 0.1
Middle East 0.5 0.5 0.6 0.7 0.7 0.7 0.9 1.2 0.8
North America 1.1 3.1 1.5 0.6 0.6 0.2 0.6 0.8 0.9
Total 3.5 6.1 3.2 1.3 1.5 0.8 3.0 3.6 3.0
Source: FGE
Naphtha: Cracks post a strong rebound but remain structurally weak

Global naphtha cracks posted solid w-o-w gains in all regions of between $6.40/bbl (USGC) and $8.30/bbl (NWE) on a weekly
average basis.
The strong increases seen for naphtha cracks go hand-in-hand with an almost $8/bbl fall in weekly average crude prices.
Indeed, there has been a shift in naphtha pricing since late April, such that an inverse correlation arose between naphtha
cracks and crude flat prices. The inverse correlation makes sense considering that an octane shortage is limiting the amount
of naphtha that can be blended into the gasoline pool. This can for instance be seen in the extremely wide reforming margins
– if more naphtha could be pushed into the gasoline pool it would thereby narrowing the reforming margin away from the
extremes it is currently pricing at.
Assuming no more naphtha can enter the gasoline pool implies that naphtha must keep itself in the petchem pool. But with
petchem demand weak on account of the Chinese lockdowns, naphtha needs to disassociate itself from its crude linkage.
Under usual circumstances, if flat crude prices rise then naphtha would too (i.e. positive correlation) but in the current situation
if naphtha prices rose, naphtha would end up pricing itself out of the petchem sector. Hence the current inverse relationship
whereby if flat crude price increases, the naphtha crack decreases in order to keep naphtha prices competitive. Figure 10
illustrates this new inverse correlation, seen from late April, by looking at the price evolution of light ends and crude relative to
the 4Q 2021 average.
Long story short, if crude prices rebound we can expect naphtha to come under pressure again. The inverse correlation is likely
going to remain in place until the petchem market normalises and/or constraints on naphtha in the gasoline pool are lifted. This
would suggest an easing in mid-September, but a return to normality will still require a stronger market for petchem derivatives.
 Light End & Ethylene Index (1= 4Q 2021 Avg)
 Global Regional Naphtha Cracks**

Naphtha
NWE/Brent -38.3 -30.0 8.3 -37.77 -20.87 -18.46
MED/Urals -11.0 -3.5 7.5 -11.05 11.48 14.04
USGC/LLS -30.0 -23.6 6.4 -32.67 -27.79 -16.60
SING/Dubai -34.3 -26.7 7.6 -35.23 -13.00 -11.00
Source: Platts*, FGE
Gasoline: Biden Administration calls for federal gas tax holiday

Average weekly gasoline cracks surged higher in all regions from the week prior. Europe and Asia led the pack with strong
gains of over $7/bbl and 5/bbl respectively.
Last week was also noteworthy for what was not released, namely the weekly EIA’s Weekly Petroleum Status Report, covering
US inventories for the week ending 17 June. This is perhaps a bigger issue than it normally would be considering the importance
of commercial stock level data in gleaning just how tight global refining capacity is. As stated above in the Refinery Margins
section, we are at a watershed moment and stock levels are key in giving direction to cracks. If the data is skipped or released
on Wednesday in tandem with the data for the week ending 24 June, there is ample room for big surprises.
Last week also saw President Joe Biden propose a 90-day suspension on federal gasoline and diesel taxes. The proposal still
has to pass Congress, something that is not automatic in the current political situation. But even if the tax holiday were passed
the impact would be minimal, as the federal tax on gasoline only amounts to a flat 18 c/gal and 24 c/gal on diesel. Moreover,
not all of this would necessarily be passed on to the consumer, while it would also be reinstated at the end of September. A
bigger impact would come if key state and local governments temporarily reduced or suspended their taxes in tandem.
In general, the ability of the US to shield consumers by cutting taxes is structurally lower than in other demand centres such
as Europe, due to the fact that US tax levels are already very low. On top of this US state and federal taxes are done on an
outright basis, rather than a percentage basis like they are in Europe. This means that, in a high price environment, the impact
of a tax holiday in Europe will tend to be stronger than in the US. European governments also pocket windfall tax revenues in
high price environments, which increases the argument for a tax holiday as European consumers get hit twice, once from
higher outright prices, and again from the percentage-based tax element.
Quite apart from this, if refining capacity is too tight, then it makes little sense to artificially increase demand, as the high prices
are already an attempt by the market to rebalance, and pricing against this at the state level will prove futile in the medium-to-
long term.
 NYMEX NYH RBOB/WTI Crack, $/bbl  Global Gasoline Cracks* vs Dtd Brent, $bbl
For the sake of argument, bringing forward the RVP shift would make it easier for US refiners to blend gasoline as it would
allow more butane to be used, opening the door for more naphtha to enter the gasoline pool. However, this would be detrimental
to the environment as it would cause more emissions from storage, and when pumping gas at the forecourt. Therefore we
would not expect such a proposal to be put forth, and if it were made, it would likely be a matter of bringing it forward by a few
weeks (e.g. to early September) rather than over the peak summer period, when temperatures are hottest and the
environmental impact highest.
 Global Regional Gasoline Cracks**

Gasoline
NWE/Brent 34.1 41.4 7.3 38.01 30.35 28.60
MED/Urals 70.3 76.6 6.2 70.32 61.92 58.36
NYH (RBOB)/WTI 52.0 53.1 1.1 51.20 52.80 46.96
USGC/LLS 51.2 53.7 2.5 48.84 42.96 39.52
SING/Dubai 34.4 39.7 5.3 29.95 25.90 22.50
Source: Platts*, FGE, NYMEX
Middle Distillates: Stockbuild needed to calm runaway cracks

Average weekly middle distillate cracks increased in all regions and across all products, relative to the prior week. Crack
increases were led by diesel, except along the USGC where jet cracks reigned supreme, even posting a $10/bbl w-o-w increase
vs LLS.
Jet/kero now has to compete against gasoline more strongly, and in Europe the resurgent gasoline crack pushed the jet vs
gasoline tonne-spread back into negative territory. This is a further signal that all clean products are tight at present and that
we may be faced with a structural inability to produce more product. As stressed above, much depends on how big the
stockbuild will be in middle distillates over the next 8-10 weeks. For prices to ease we would need several consecutive weeks
of sizeable back-to-back stock increases, totalling at least 30-40 million barrels. If this is not forthcoming, we would expect an
even greater global disruption in January/February as Europe replaces its diesel imports from Russia.
We expect the USA to be the biggest incremental supplier of diesel to Europe given its closer proximity to Europe. Diesel
supply upside from the Middle East will only come once balances there lengthen on the ramp up of Jizan (expected in 3Q 2022)
and Al Zour (expected towards the end of the year at the earliest), though this is not expected to add much more than 200
kb/d. But higher inflows into Europe from the USA will leave Latin America short and a key question remains to what extent
Russia will be able to place its diesel there.
 Global Jet/Kero vs Gasoline Spreads, $/t  US and East of Suez Diesel Arb to NWE, $/bbl
On the arbitrage scene, a $16/bbl premium of non-Russian diesel over open origin diesel continues to keep arb windows open
on paper from the USA and Asia in addition to the steady flows from the Middle East. That said, (preliminary) exports of June-
loading diesel fixed to Europe from origins outside of Russia came in quite low, at just 500 kb/d. Due to forward loading periods
(and continued availability of Russian diesel), we expect July-loading flows to be significantly higher.
 Global Regional Middle Distillate Cracks*

Jet/Kero
NWE/Brent 53.1 56.0 2.9 49.15 45.48 35.15
MED/Urals 87.8 90.7 2.9 83.40 79.45 68.86
USGC/LLS 55.5 65.5 9.9 55.34 51.45 41.32
SING/Dubai 49.6 53.4 3.8 32.60 30.20 28.40
Diesel/ULSD
NWE/Brent 60.6 64.6 4.0 49.37 45.71 35.33
MED/Urals 93.1 96.4 3.2 83.53 79.58 68.95
USGC/LLS 63.7 70.7 7.0 59.84 55.45 45.32
SING/Dubai 59.5 65.3 5.8 40.10 36.50 33.70
Gasoil
NWE/Brent 49.9 53.6 3.7 46.64 42.94 32.65
MED/Urals 88.0 90.6 2.5 79.86 76.18 66.23
USGC/LLS 50.8 58.7 7.9 48.32 44.70 34.74
SING/Dubai 52.5 56.7 4.2 35.92 32.53 29.81
Fuel Oil: RAPID residue likely to end up in Atlantic Basin

Last week HSFO cracks strengthened across the board on a weekly average basis in all regions. The increases were
conservative considering the rapid fall in crude prices which would typically inflate HSFO cracks. W-o-w gains for both HSFO
and VLSFO ranged between $1/bbl and $3/bbl.
Seasonal demand for power generation in the Middle East and Asia continues to support the prompt market, keeping the front-
month in backwardation, if only just.
In the Asian market, while HSFO demand for power generation should pick up as we head deeper into summer in South Asia
and the Middle East, we heard PETRONAS’ PIC refinery (also known as RAPID) is looking to export 2-3 cargoes of high-sulfur
atmospheric residue (HSAR) in July. The refinery previously exported one cargo of HSAR each in May and in June (see FGE
- Asia Oil Weekly - Naphtha and propane in a race to the bottom - 10 June 2022). This is also an indication that Petronas may
be struggling to stream their ARDS units.
We have heard that cargoes of non-Russian HSAR and VGO are fetching (very) strong premiums to Dated Brent in Europe
and the USA (double-digit premiums in the case of VGO) and so would not be surprised if RAPID barrels were shipped west
of Suez, potentially even as far as US shores. With product cracks for both gasoline and diesel strong, high complexity refiners
will be keen to get their hands on high quality secondary feedstock if this allows them to run even slightly higher. Asian refiners
will meanwhile be outbid relatively quickly considering the wider availability of discounted Russian secondary feedstocks.
VLSFO cracks increased this week in tandem with gasoline and gasoil cracks. VLSFO availability in Asia continues to be tight
even amid higher inflows from Europe and the Middle East. China’s VLSFO production could face some downside due to the
fire that broke out at Sinopec’s Shanghai refinery on 18 June. However, we expect overall VLSFO production in Asia to increase
as more capacity returns online from spring maintenance. Arbitrage flows from the West should remain elevated in July given
that the prompt-month arbitrage spread was open throughout June. This should provide some respite to VLSFO cracks and
steep backwardation over the next quarter.
 S’Pore HSFO 380cst & VLSFO Timespreads, $/t  NYMEX Singapore HSFO/Dubai Crack, $/bbl
 Regional Fuel Oil Cracks*
$/bbl unless stated Weekly Averages (w/e) w-o-w Monthly Averages (f'cast)
otherwise 17-Jun-22 24-Jun-22 Change Jun-22 Jul-22 Aug-22
VLSFO (0.5%S) (Calculated using 6.84 bbl/t conversion factor)
NWE/Brent 0.5 3.5 3.0 -0.57 6.22 5.55
MED/Urals 37.3 40.2 2.9 35.65 41.88 41.53
USGC/LLS 11.4 12.3 0.9 16.30 10.59 8.78
SING/Dubai 30.8 33.6 2.8 27.47 15.64 15.93
HSFO (3.5%S)
NWE/Brent -33.7 -31.8 1.9 -36.71 -24.38 -20.33
MED/Urals -5.9 -2.9 3.0 -9.10 6.23 10.24
USGC/LLS -21.2 -18.1 3.1 -26.89 -17.77 -14.30
SING/Dubai -20.6 -19.3 1.3 -26.22 -11.10 -7.10
Hi-5 Spread (VLSFO-HSFO) ($/t)
Northwest Europe 280 284 4 292 263 222
Mediterranean 337 334 -3 348 296 257
US Gulf Coast 270 253 -18 343 249 204
Singapore 399 405 7 413 239 205
Benchmark Refinery Margins

Please note that blended/cracked fuel oil margins in the examples below have been valued either as VLSFO (LS) or HSFO
(HS). Similarly, atmospheric residue has been valued at local VLSFO/HSFO prices but with an added gasoil premium.
Hydroskimming Margins
 NWE LS HSK, $/bbl  NWE HS HSK, $/bbl
36 60
32 50
28 40
24
20 30
16 20
12 10
8
4 0
0 -10
-4 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22
Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22
Urals NWE Forties
Brent WTI Bonny Light Arab Light Johan Sverdrup
Source: FGE Source: FGE
 MED LS HSK, $/bbl  MED HS HSK, $/bbl
40 60
30 40
20 20
10 0
0 -20
Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22
Azeri Light Saharan WTI Urals MED CPC Arab Light
 USGC LS HSK, $/bbl  USGC HSK, $/bbl
50 30
40
20
30
20 10
10
0 0
WTI MEH LLS Mars WCS Maya Arab Light

 SING LS HSK, $/bbl  SING HS HSK, $/bbl
80 20
60 15
40 10
5
20
0
0
-5
-20 -10
Minas Brent Dalia WTI ESPO Murban Dubai Arab Light
FCC Margins
 NWE LS FCC, $/bbl  NWE HS FCC, $/bbl
40 60
35 50
30 40
25 30
20 20
15 10
10 0
5 -10
0 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22
Urals NWE Forties
 MED LS FCC, $/bbl  MED HS FCC, $/bbl
45 60
40
35 40
30
25 20
20
15
0
10
5
0 -20

 USGC LS FCC, $/bbl  USGC HS FCC, $/bbl
60 40
30
40
20
20
10
0 0
 SING LS FCC, $/bbl  SING HS FCC, $/bbl
80 30
60 20
40
10
20
0
0
-20 -10
Hydrocracking Margins
 NWE LS HDC, $/bbl  NWE HS HDC, $/bbl
45 70
40 60
35 50
30 40
25 30
20 20
15 10
10 0
5 -10
0 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22
Urals NWE Forties
 MED LS HDC, $/bbl  MED HS HDC, $/bbl
55 70
50
45 60
40 50
35
30 40
25 30
20
15 20
10
5 10
0 0
 USGC LS HDC, $/bbl  USGC HS HDC, $/bbl
60 45
50 40
35
40 30
30 25
20
20 15
10 10
5
0 0
 SING LS HDC, $/bbl  SING HS HDC, $/bbl
90 40
80
70 30
60
50 20
40 10
30
20 0
10
0 -10

Coking Margins
 NWE LS COK, $/bbl  NWE HS COK, $/bbl
50 80
40 60
30 40
20
20
10
0
0
-10 -20
Urals NWE Forties
 MED LS COK, $/bbl  MED HS COK, $/bbl
50 80
40 60
30
40
20
10 20
0 0
 USGC LS COK, $/bbl  USGC HS COK, $/bbl
60 50
40
40 30
20
20
10
0 0
 SING LS COK, $/bbl  SING HS COK, $/bbl
80 36
70 32
60 28
50 24
40 20
30 16
20 12
10 8
0 4
-10 0
-4
 Quarterly World Oil Supply/Demand and Stock Changes
QUARTERLY WORLD OIL SUPPLY/DEMAND & STOCK CHANGE 13th June 2022*
million b/d
2021 1Q22 2Q22 3Q22 4Q22 2022 1Q23 2Q23 3Q23 4Q23 2023
DEMAND
USA 19.77 20.23 20.26 20.51 20.44 20.36 20.36 20.51 20.88 20.80 20.64
Canada/Mexico 4.18 4.17 4.35 4.46 4.48 4.37 4.42 4.35 4.46 4.48 4.43
Brazil 3.20 3.09 3.09 3.27 3.26 3.18 3.01 3.08 3.27 3.23 3.15
Other Latin America 3.87 4.05 4.10 4.03 4.03 4.05 4.13 4.17 4.10 4.08 4.12
Europe 13.77 13.84 14.11 14.52 14.14 14.15 13.90 14.18 14.74 14.31 14.28
FSU Apparent Demand 4.79 5.27 4.19 4.42 4.24 4.53 4.60 4.63 4.83 5.18 4.81
Japan 3.54 3.85 3.19 3.29 3.70 3.51 3.81 3.19 3.26 3.59 3.46
S.Korea/Aus/NZ 3.97 4.18 4.06 4.08 4.27 4.15 4.31 4.21 4.19 4.34 4.26
China Apparent Demand 14.84 15.66 15.82 15.77 16.20 15.86 16.17 16.28 16.38 16.60 16.36
India 4.88 5.24 5.19 4.87 5.29 5.15 5.34 5.33 5.00 5.45 5.28
Other Asia-Pacific 8.68 8.87 8.93 9.16 9.56 9.13 9.54 9.56 9.60 9.88 9.65
Africa 4.10 4.33 4.37 4.32 4.34 4.34 4.58 4.48 4.40 4.42 4.47
Middle East 9.15 9.54 9.30 9.63 9.45 9.48 9.45 9.45 9.72 9.53 9.53
Total Real Demand 99.01 101.26 99.96 102.12 103.22 101.64 103.01 102.99 104.57 105.49 104.02
Total Apparent Demand 98.74 102.32 100.97 102.33 103.41 102.26 103.61 103.42 104.82 105.90 104.44
SUPPLY
USA 16.62 17.17 17.52 18.00 18.46 17.79 18.61 18.85 18.82 19.04 18.83
Canada 5.37 5.44 5.22 5.57 5.60 5.46 5.66 5.31 5.65 5.67 5.57
Mexico 1.95 2.00 1.99 2.00 1.97 1.99 2.09 2.08 2.06 2.04 2.06
Brazil 3.00 3.07 3.06 3.09 3.09 3.08 3.05 3.10 3.20 3.28 3.16
North Sea 2.99 2.96 2.78 2.81 3.05 2.90 3.12 3.02 3.01 3.21 3.09
FSU 13.93 14.58 13.40 13.40 13.33 13.68 13.39 13.84 14.19 14.54 13.99
China 3.98 4.10 4.13 4.06 3.97 4.07 4.08 4.10 4.08 4.09 4.09
Other Non-OPEC Output (incl. Qatar) 10.33 10.41 10.61 10.80 10.87 10.67 10.66 10.64 10.71 10.72 10.68
Total Non-OPEC Output (Crude/NGLs) 58.18 59.71 58.69 59.72 60.35 59.62 60.65 60.93 61.72 62.59 61.47
Bio-liquids (ethanol/bio-gasoline, etc) 2.60 2.70 2.70 2.70 2.70 2.70 2.80 2.80 2.80 2.80 2.80
GTL/CTL 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40
Processing Gain, balancing item etc 3.90 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00
Total Non-OPEC Supplies 65.08 66.81 65.79 66.82 67.45 66.72 67.85 68.13 68.92 69.79 68.67
Angola 1.15 1.15 1.16 1.15 1.15 1.15 1.15 1.12 1.09 1.08 1.11
Iran 2.42 2.54 2.38 2.55 2.55 2.50 2.55 2.64 2.54 2.60 2.58
Iraq 4.12 4.30 4.45 4.61 4.64 4.50 4.56 4.68 4.77 4.69 4.67
Libya 1.15 1.11 0.78 0.68 0.84 0.85 1.11 0.99 0.98 1.01 1.02
Nigeria 1.30 1.27 1.19 1.29 1.30 1.26 1.37 1.32 1.26 1.25 1.30
Saudi Arabia 9.09 10.21 10.45 10.76 10.82 10.56 10.74 10.68 10.65 10.54 10.65
Venezuela 0.50 0.62 0.66 0.68 0.68 0.66 0.69 0.71 0.73 0.73 0.71
Other OPEC 6.59 7.08 7.25 7.45 7.47 7.32 7.48 7.52 7.66 7.62 7.57
Total OPEC Crude Output 26.32 28.27 28.33 29.19 29.45 28.81 29.65 29.65 29.68 29.52 29.62
NGLs/other 6.17 6.50 6.50 6.51 6.56 6.52 6.54 6.62 6.58 6.66 6.60
Total OPEC Oil Output 32.49 34.76 34.83 35.69 36.01 35.32 36.19 36.27 36.26 36.18 36.23
Total Oil Supplies 97.56 101.58 100.62 102.52 103.46 102.04 104.04 104.40 105.18 105.97 104.90
STOCK CHANGE (mmb/d)

OECD Company -0.98 -0.26 0.38 0.91 0.11 0.28 0.45 0.57 0.31 -0.15 0.29
Strategic/government -0.18 -0.39 -1.22 -1.20 -0.32 -0.78 0.05 0.16 0.16 0.16 0.14
Non-OECD/transit/floating storage -0.01 -0.31 -0.05 0.04 0.39 0.02 -0.10 -0.10 -0.23 0.25 -0.04
Other Implied Stocks Change -0.00 0.22 0.55 0.43 -0.12 0.27 0.04 0.34 0.11 -0.19 0.08
Implied Stock Change -1.17 -0.74 -0.35 0.19 0.05 -0.21 0.44 0.98 0.36 0.07 0.46
Reference items
Demand change year-on-year 6.2% 5.6% 2.4% 2.1% 0.7% 2.7% 1.7% 3.0% 2.4% 2.2% 2.3%
Call on OPEC crude (no stock change) 27.49 29.01 28.67 29.00 29.39 29.02 29.21 28.67 29.32 29.45 29.16
End-period OECD company stocks (bill bbls) 2.54 2.58 2.66 2.67 2.71 2.77 2.80 2.78
End-period OECD stock cover (days) 56.5 56.0 57.9 56.4 59.8 59.2 60.2 63.7
Crude Prices ($/bbl)

Platts Dated Brent* 71.1 101.4 115.3 120.5 115.4 113.1 103.0 92.3 90.3 87.3 93.3
WTI 68.0 94.5 111.0 114.8 111.8 108.0 98.6 87.0 85.6 83.8 88.7
Dubai 69.20 95.6 110.1 112.0 109.8 106.9 98.9 87.4 86.0 82.7 88.8
Urals NWE 68.50 87.3 80.1 85.5 80.5 83.4 70.7 65.4 68.6 70.5 68.8
Urals Med 69.10 90.2 80.8 86.3 81.3 84.7 71.6 66.0 69.2 71.4 69.6
*Please note that this table is usually only updated once a month; it was last updated on 13th June 2022 © FGE 2022
Source: Platts*, FGE, NYMEX
© 2022 FGE - For queries, please email FGE@fgenergy.com. *Prices in this report marked with the
The dissemination, distribution, or copying by any means source Platts are sourced from S&P
whatsoever without FGE’s prior written consent is strictly Global Platts, © 2022 S&P Global Inc.
prohibited. www.fgenergy.com All rights reserved.

FGE - Weekly Oil Market and Refining Update - 27 June

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

FGE - Weekly Oil Market and Refining Update - 27 June

Uploaded by

Copyright:

Available Formats

Weekly Oil Market & Refining Update

If we don’t see Product Stockbuilds soon, the World is

Short-Term Global Oil Service 27 June 2022

•  Naphtha: Cracks post a strong rebound but remain structurally weak

•  Gasoline: Biden Administration calls for federal gas tax holiday

•  Middle Distillates: Stockbuild needed to calm runaway cracks

•  Fuel Oil: RAPID residue likely to end up in Atlantic Basin

•  Benchmark Refinery Margins

Refining Developments: Al Zour only expected to start up in 4Q with ability

Refining Margins: If we don’t see product stockbuilds soon, the world is

 Benchmark Refinery Margins**

Weekly Averages (w/e) w-o-w Monthly Averages (f'cast)

 US RINs Costs & Impact on Refinery Margins**

Weekly Averages (w/e) w-o-w Historical Monthly Average

 Global Refinery Runs Outlook

Naphtha: Cracks post a strong rebound but remain structurally weak

 Light End & Ethylene Index (1= 4Q 2021 Avg)

 Global Regional Naphtha Cracks**

Weekly Averages (w/e) w-o-w Monthly Averages (f'cast)

Gasoline: Biden Administration calls for federal gas tax holiday

 Global Regional Gasoline Cracks**

Weekly Averages (w/e) w-o-w Monthly Averages (f'cast)

Middle Distillates: Stockbuild needed to calm runaway cracks

 Global Regional Middle Distillate Cracks*

Weekly Averages (w/e) w-o-w Monthly Averages (f'cast)

Fuel Oil: RAPID residue likely to end up in Atlantic Basin

 Regional Fuel Oil Cracks*

Benchmark Refinery Margins

 MED LS HSK, $/bbl  MED HS HSK, $/bbl

 USGC LS HSK, $/bbl  USGC HSK, $/bbl

WTI MEH LLS Mars WCS Maya Arab Light

 SING LS HSK, $/bbl  SING HS HSK, $/bbl

 MED LS FCC, $/bbl  MED HS FCC, $/bbl

Azeri Light Saharan WTI Urals MED CPC Arab Light

 USGC LS FCC, $/bbl  USGC HS FCC, $/bbl

 SING LS FCC, $/bbl  SING HS FCC, $/bbl

 MED LS HDC, $/bbl  MED HS HDC, $/bbl

 USGC LS HDC, $/bbl  USGC HS HDC, $/bbl

 SING LS HDC, $/bbl  SING HS HDC, $/bbl

Minas Brent Dalia WTI ESPO Murban Dubai Arab Light

 MED LS COK, $/bbl  MED HS COK, $/bbl

 USGC LS COK, $/bbl  USGC HS COK, $/bbl

 SING LS COK, $/bbl  SING HS COK, $/bbl

 Quarterly World Oil Supply/Demand and Stock Changes

STOCK CHANGE (mmb/d)

Crude Prices ($/bbl)

Source: Platts*, FGE, NYMEX

You might also like