Cheap Oil And Costly Fuel Rare Windfall From Harvey For Fuel Traders In Asia

Cheap Oil And Costly Fuel Rare Windfall From Harvey For Fuel Traders In Asia

The shutdown of almost a quarter of US crude refining capacity in the wake of Hurricane Harvey is presenting a rare opportunity for fuel traders in Asia.

A spike in American gasoline prices as the storm cuts off supplies is drawing shipments from as far away as Singapore. The disruptions are also weighing on global crude futures, helping drive up processing profits thousands of miles away from Harvey’s trail of destruction on the US Gulf Coast. Returns from making oil products in Asia have soared to the highest level in more than one and a half years. Even companies that aren’t transporting fuel west are benefiting, according to Indian Oil Corp., the nation’s top refiner.

Traders have hired vessels to ferry at least 105,000 tons of processed products from Singapore to America next month, and are seeking to charter more. Tankers have been booked to transport gasoline from Europe to the US, and the fuel is now set to be shipped over even longer distances as the premium of American prices soar relative to those in Asia. Additionally, Indian Oil says demand is strong enough for refiners that don’t export to stick to domestic markets and enjoy cheaper feedstock and higher fuel prices.

“Harvey is creating a dual benefit for Asian refiners,” said Arun Kumar Sharma, finance director at Indian Oil. “The shutdown of US refineries is pulling down crude prices and pushing up prices of petroleum products. This will have a double-impact on refinery margins, especially in Asia.” Read More…

 

 

 

 

 

READ  Use of kerosene, diesel falls, LPG consumption rises on clean energy drive
Credit  By: LiveMint

Leave a Reply

Your email address will not be published.