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Oil Margins – Vol. 21/10
Refining margins down, auto losses up
Refining margins lower. Refining margins for 1-15 Nov were at
US$4.3/bbl, down US$1/bbl from the inflated previous-fortnight
margins, on account of end of strike at the French refineries. For
3QFY11 till date, margins stand higher at US$4.7/bbl vs. US$4.2/bbl
in 2QFY11; for FY11, we estimate margins to rise to US$4/bbl vs.
FY10 average of US$3.5/bbl. Dubai-Arab heavy spread was
US$2.9/bbl, down US$0.2/bbl from the previous fortnight.
Gasoil spread up, gasoline down. For 1-15 Nov, the gasoil spread
was US$8.5/bbl, up US$0.2/bbl from the previous fortnight; the
gasoline spread was US$4.5/bbl, down US$0.9/bbl.
Auto-fuel losses increase. Based on average global gasoil and
gasoline prices over 1-15 Nov, auto-fuel under-recoveries for 16-31
Nov are likely to be `4.4/litre versus `3.1/litre the previous
fortnight. Losses were higher on account of higher crude (up
US$4.6/bbl from the previous fortnight), although marginally offset
by hike in domestic gasoline prices and weakening international
gasoline cracks.
Auto-fuel breakeven prices rise a tad. We estimate auto-fuel
breakeven crude prices to marginally increase to US$73.7/bbl (at
US$73.2/bbl the previous fortnight) due to slight decline in
international product crack. Cooking fuel breakeven crude prices
would remain flat at US$33/bbl.
Crude prices up. For 1-15 Nov, the Brent crude price was up
US$4.6/bbl from the previous fortnight, on optimism about US
quantitative easing, at US$86.9/bbl. Natural gas prices remained
subdued and averaged US$3.9/m Btu, marginally higher than
US$3.8/bbl the previous fortnight.
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