S Korea’s SK Innovation sees firm 2Q refining margins

  • : Crude oil, Oil products
  • 24/04/29

South Korean refiner SK Innovation expects refining margins to remain elevated in this year's second quarter because of continuing firm demand, after achieving higher operating profits in the first quarter.

SK expects demand to remain solid in the second quarter given a strong real economy, expectations of higher demand in emerging markets and continuing low official selling price (OSP) levels. This is despite the US Federal Reserve's high interest rate policy and oil price rallies, which are weighing on crude demand.

The company's sales revenue dropped to 18.9 trillion won ($13.7bn) in the first quarter, down by 3.5pc on the previous quarter. Its energy and chemical sales accounted for 91pc of total revenue, while battery and material sales accounted for the remaining 9pc.

But SK's operating profit increased to W624.7bn in January-March from W72.6bn the previous quarter. This came as its refining business flipped from an operating loss of W165bn in October-December to an operating profit of W591.1bn in the first quarter. SK attributed this increase to elevated refining margins because of higher oil prices, as well as Opec+ production cut agreements and OSP reductions.

First-quarter gasoline refining margins almost doubled on the previous quarter from $7.60/bl to $13.30/bl, although diesel and kerosine edged down to $23.10/bl and $21.10/bl respectively.

SK Innovation's 840,000 b/d Ulsan refinery operated at 85pc of its capacity in the fourth quarter, steady from 85pc in the previous quarter but higher than 82pc for all of 2023. The refiner's 275,000 b/d Incheon refinery's operating rate was at 88pc, up from 84pc in the fourth quarter and from 82pc in 2023. SK plans to carry out turnarounds at its 240,000 b/d No.4 crude distillation unit and No.1 residual hydrodesulphuriser, both at Ulsan, in the second quarter. Its No.2 paraxylene unit in Ulsan will have a turnaround in the same quarter.


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24/05/15

IEA downgrades 2024 oil demand growth

IEA downgrades 2024 oil demand growth

London, 15 May (Argus) — The IEA now sees oil demand growth in 2025 outpacing this year, after it again downgraded its forecast for 2024 — mostly because of lower than anticipated first-quarter demand in Europe. In its latest Oil Market Report (OMR), published today, the Paris-based agency lowered its oil demand growth forecast for this year by 140,000 b/d to 1.06mn b/d, citing weak gasoil consumption. This would leave total oil demand in 2024 at 103.16mn b/d. "Poor industrial activity and another mild winter have sapped gasoil consumption this year, particularly in Europe where a declining share of diesel cars in the fleet were already undercutting consumption," the IEA said. The agency again lowered its 2024 forecast for Chinese oil demand growth, this time by 30,000 b/d to 510,000 b/d. It sees China's growth slowing to 360,000 b/d in 2025, but the country will remain the largest single contributor to global growth. The IEA also highlighted a rise in global oil inventories, which increased for a second consecutive month in March — by 36.4mn bl. It said preliminary data show further stock builds in April as "onshore oil inventories skyrocketed after oil on water was discharged." This after onshore stocks fell in March to the lowest since at least 2016, and OECD inventories to a 20-year low. The latest estimates mean the IEA now sees oil demand growth coming in higher in 2025 at 1.18mn b/d, up by 30,000 b/d from last month's estimate. This contrast sharply with Opec , which continues to see much higher growth this year at 2.25mn b/d and next year at 1.85mn b/d. On global oil supply, the IEA lowered its 2024 growth estimate by 160,000 b/d to 580,000 b/d citing maintenance in Canada, outages in Brazil and logistical constraints in the US. It noted a 150,000 b/d fall in Russian output in April, related to a new Opec+ production cut. It forecasts non-Opec+ growth to rise by 1.4mn b/d this year, and an 840,000 b/d fall from Opec+ because of production cuts. The agency projects global gains next year at 1.8mn b/d, with supply hitting a record 104.5mn b/d. The US, Guyana, Canada and Brazil continue to dominate global supply gains with a combined forecast 1.1mn b/d of additions this year and next. The IEA's latest forecasts imply a tighter market in 2024 than it previously anticipated. Its balances now show a global oil supply deficit of 460,000 b/d this year, compared with 270,000 b/d in last month's report. The projections assume Opec+ voluntary cuts remain in place until the of the year, although the group has yet to decide its output policy for the second half of the year. It may do so at a ministerial meeting scheduled for 1 June in Vienna. The IEA's latest balances put the call on Opec+ crude at around 42mn b/d in the second half of this year — 700,000 b/d above the group's April output. A recent slide in oil prices could keep pressure on the alliance to keep the cuts in place for longer. The IEA put the fall in oil prices down to concerns over the health of the global economy and dissipating fears of a wider conflict in the Middle East. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia to explore biofuels mandate, incentives


24/05/15
24/05/15

Australia to explore biofuels mandate, incentives

Sydney, 15 May (Argus) — Australia's federal budget is funding mandate studies and pursuing certification schemes, given the increasing likelihood biofuels will play a significant role in the nation's energy transition. The federal government has pledged A$18.5mn ($12.3mn) in the four years from 2024-25 to develop a certification scheme for low-carbon liquid fuels, including SAF and renewable diesel, by expanding its guarantee of origin programme for long-term demand by the industry . An extra A$1.5mn over two years from 2024-25 will go to analysis of the regulatory impact of the costs and benefits of introducing mandates for low-carbon liquid fuels, while the government has promised consultation on possible production incentives for domestic project developers. Money from the A$1.7bn Future Made in Australia innovation fund will also be made available for liquid fuels research, to be administered by the Australian Renewable Energy Agency to commercialise net zero technology. "The package of announcements is dealing with crucial areas essential for deployment, including certification to ensure Australia develops a sustainable liquid fuels industry, resourcing to support key demand side interventions such as a low carbon fuels standard and consultation on additional supply-side measures such as production credits," Bioenergy Australia chief executive Shahana McKenzie said on 15 May. The funding pales in comparison to the $9bn hydrogen investment promised by the government, although much of that is deferred to the decade from the 2027-28 fiscal year. About 45pc of Australia's energy use is supplied by liquid fuels but the nations lags behind many countries on decarbonising its transport sector. Australia's Commonwealth Scientific and Industrial Research Organisation forecasts demand for jet fuel will grow 75pc by 2050. But no domestic production facility has yet reached a financial close, despite major airlines committing to increasing their SAF use. Domestic feedstocks including agricultural residues could meet 60pc of Australian jet fuel demand initially, growing to 90pc by 2050, Bioenergy Australia has said, while pursuing renewable fuels could cut the country's dependence on oil product imports from 90pc to 61pc by 2040. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Alberta wildfire forces oil sands communities to flee


24/05/14
24/05/14

Alberta wildfire forces oil sands communities to flee

Calgary, 14 May (Argus) — A state of local emergency is unfolding near a major city in Alberta's oil sands region as an out-of-control wildfire grows in size, potentially putting various communities in its path. The wildfire to the southwest of Fort McMurray, Alberta, has grown to about 10,000 hectares (25,000 acres) after more than tripling in recent days, prompting officials to issue an evacuation order to residential communities on the southern part of the city on Tuesday. The Regional Municipality of Wood Buffalo has told residents in Beacon Hill, Abasand, Prairie Creek and Grayling Terrace to evacuate while the rest of Fort McMurray and neighbouring communities remain on an evacuation notice. "These neighbourhoods directly interface with where the fire could potentially spread. Regional Emergency Services will better be able to defend these neighbourhoods from wildfire if they are uninhabited and clear," said the municipality. Alberta's largest northeast city has a population of about 75,000 with many employed by oil sands operators in the region which pump out a combined 2mn b/d of crude. This comes in the form of both synthetic crude and diluted bitumen, representing roughly half of Alberta's output. No evacuation orders have been made for oil sands projects, so far, with most being about 40 kilometres (25 miles) or more north of Fort McMurray. Some oil sands projects have already been winding down for seasonal maintenance. There are about 50 active fires in the province. One other, near Grande Prairie in the northwest, is also out of control. About 400,000 b/d of oil equivalent (boe/d) were shut in a year ago in what was the worst wildfire season on record, according to the province. The blazes mostly affected operations in the liquids- rich northwest part of the province, but at least one oil sands project also had to temporarily evacuate. Wildfires also affected Alberta production in 2019, but the most devastating for the region was three years earlier, when fires forced mass evacuations and destroyed parts of Fort McMurray. Wildfires in the spring of 2016 knocked about 1mn b/d of crude output off line. "It's important to note that fire activity is very different than the 2016 Horse River wildfire and we are well positioned to respond to this situation," said regional fire chief Jody Butz on Tuesday. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

CVR expects normal Oklahoma refinery ops by end 2Q


24/05/14
24/05/14

CVR expects normal Oklahoma refinery ops by end 2Q

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US court upholds RFS blending targets for 2020-22


24/05/14
24/05/14

US court upholds RFS blending targets for 2020-22

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