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Oil Margins – Vol. 22/10
Refining margins and auto losses up
Refining margins spike up. Refining margins for 16-30 Nov were
US$6.2/bbl, sharply up US$1.9/bbl from the previous fortnight on
account of diesel shortage in China and stronger global oil demand
data. For 3QFY11 till date, margins stand higher, at US$5.1/bbl vs.
US$4.2/bbl in 2QFY11; we estimate margins to rise to US$4/bbl in
FY11 vs. FY10 average of US$3.5/bbl. Dubai-Arab heavy spread was
US$3.6/bbl, up US$0.7/bbl from the previous fortnight.
Product-cracks up. For 16-30 Nov, the gasoil spread was
US$9.2/bbl, up US$0.7/bbl from the previous fortnight; the gasoline
spread was US$6.5/bbl, up US$2.0/bbl.
Auto-fuel losses increase. Based on average global gasoil and
gasoline prices during 16-30 Nov, auto-fuel under-recoveries for 1-15
Dec are likely to be `4.8/litre vs. `4.4/litre the previous fortnight.
Losses were higher on account of stronger international productcracks
and rupee depreciation, although marginally offset by slight
weakening in crude.
Auto-fuel breakeven prices to dip. We estimate auto-fuel
breakeven crude prices to decrease to US$70.7/bbl for 1-15 Dec (vs.
US$73.7/bbl the previous fortnight) due to rising international
product-crack and the depreciating rupee. Cooking-fuel breakeven
crude prices declined to US$30.7/bbl from US$33/bbl due to rise in
LPG product-crack.
Crude prices down. For 16-30 Nov, the Brent crude price was
down US$2.5/bbl from the previous fortnight, on account of
Chinese monetary tightening at US$84.4/bbl. Natural gas prices
remained subdued and averaged US$4.3/m Btu, higher than
US$3.9/bbl the previous fortnight.
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