Asian Refiners To Raise Gasoline Output On Higher Margins

Several Asian refiners are likely to maximise gasoline output from May and reduce gasoil output, amid higher profits for gasoline ahead of this summer’s driving season, industry sources and analysts say.

• The adjustments come after margins for gasoil and jet fuel slumped on rising supplies as China boosted exports, while the arbitrage window to Europe has been shut since early 2023 due to ample supplies on the continent.
• Meanwhile, gasoline profits have rebounded as traders build supplies ahead of a seasonal travel demand boost from April through September.
• By adjusting production, the oversupplied gasoil market in Asia could tighten again and support prices.
• Taiwan's Formosa Petrochemical Corp plans to cut gasoil output from some units, such as the delayed coking unit, and ramp up gasoline production from its residue fluid catalytic cracker, spokesman KY Lin told Reuters. "Our gasoil production volumes will be down around 5%, with gasoline production yield up 2-3% for May compared with the original production plan," said Lin.
• The extent to which Asian refiners can change production yields between light distillates - gasoline and naphtha - and middle distillates - gasoil and jet fuel - is limited on feedstock and catalyst reasons, estimated at between 3% and 5% on average, according to industry sources.
• Refiners count on demand from the US as imports are still required, even though US refineries have ramped up output after first-quarter maintenance, a trader added.