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Refinery margin tracker: Global refinery margins strengthen, supported by planned work

Global refinery margins ticked higher as planned work in Canada, Europe and China offset the completion of planned maintenance in the US, analysis from S&P Global Platts showed Monday.

On the US West Coast, margins rose again, gaining further traction as unplanned outages continued in the region.

The Alaska North Slope cracking margin averaged $15.09/b in the week that ended March 29, the highest since October 2018, Platts margin data show.

Coking margins also increased, with indigenous California THUMS coking margins averaging $17.89/b in the most recent week, up from $14.69/b a week earlier.

Platts margin data reflects the difference between a crude’s netback and its spot price. Netbacks are based on crude yields, which are calculated by applying Platts refined product price assessments to yield formulas designed by Turner, Mason & Co.

About 156,000 b/d of USWC fluid catalytic cracking capacity was forecast to be offline in the week ending April 5, according to S&P Global Platts Analytics data. That will likely increase with a unplanned outage of the 73,800 b/d fluid catalytic cracking unit at Chevron’s 269,000 b/d El Segundo, California, refinery that began earlier Monday, according to sources.

Overall, second-quarter 2019 US crude distillation unit utilization will rise as outages drop from 1.658 million b/d in the first quarter to 1.247 million b/d, Platts Analytics estimates show.

AGAINST THE TREND
Globally, Platts Analytics expects planned Q2 crude distillation outages to average 8 million b/d, up from 6.75 million b/d offline in Q1.

This is due in part to increased outages in Asia. Planned crude distillation outages at Asian refineries will rise in Q2 to 2.353 million b/d from 1.2 million b/d in Q1 as China begins planned work at its plants. Q2 Chinese planned crude distillation unit downtime will rise to 855,000 b/d from 494,000 b/d in Q1.

Singapore cracking margins have already started to perk up. The Dubai cracking margin averaged $4.92/b in the week that ended March 29, up from $4.50/b a week earlier.

European margins are also increasing ahead of planned outages. The Amsterdam-Rotterdam-Antwerp cracking margin for Houston Light Sweet averaged $8.45/b in the week that ended March 29, up from $5.54/b a week earlier.

Platts Analytics forecasts that 882,000 b/d of European crude distillation capacity will be offline in Q2, compared with the 733,000 b/d offline in Q1.
Source: Platts

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