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Asia Margins Fall on Russia Export, Warm Winter and New Supplies

OIL PRODUCTS

The collapse in Asia oil refining margins is due to continued exports of Russian diesel, the warm northern hemisphere winter and increased fuel supplies from new Chinese and Middle Eastern units according to Citi on 23 April.

  • Gross refining margins in Singapore have fallen from 7$/bbl - 8$/bbl in February and March to about 2$/bbl - 3$/bbl.
  • The new Kuwait Al-Zour and Saudi Jizan refineries in the Middle East have increased operations leading to a rise in diesel exports to add to the weak market.
  • Focus is now on China’s second batch of export quotas, possibly issued in May/June, and on domestic travel demand.

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