New shipping rules, China pummel Asian refinery profits

Gasoil exports from Asian producers are expected to be around 7.5-8.0 million tons in November, up from October’s 7.3-7.4 million. (Reuters/File)
Updated 25 November 2019

New shipping rules, China pummel Asian refinery profits

  • Refinery margins in Asia have been knocked to the lowest since the financial crisis in 2008 by some measures

LAUNCESTON, Australia: Profits at Asian refineries are being buffeted by a combination of factors, chief among them uncertainty over how exactly new shipping fuel standards will play out and the rise of China as a product exporter.

Refinery margins in Asia have been knocked to the lowest since the financial crisis in 2008 by some measures, as the industry grapples with the disparate factors.

The return from processing a barrel of Dubai crude at a typical Singapore refinery was a loss of $1.19 a barrel in early Asian trade on Monday. This compares with the October average profit of $4.11 a barrel and the 365-day moving average of $4.08 a barrel.

Another measure of refinery profits is known as gross refining margins, which measures the incentive a refiner has to process an additional barrel of crude, and not total profit derived from all barrels of oil sent through the plant.

Under this measure, a typical Singapore refinery processing a barrel of Dubai crude is making a loss of $10.53 a barrel, which is actually slightly worse than the low of $10.49 seen in July 2008. The gross refining margin has also dropped rapidly, given it was at a profit of $6.14 a barrel on Sept. 23.

What the numbers show is just how quickly refining margins have collapsed in recent weeks.

Part of the problem is a surge in the availability of gasoil, the fuel used to make diesel and jet kerosene.

Refineries in China are exporting more diesel and jet kerosene, a result of a combination of factors including soft domestic demand growth, the addition of new refining capacity and a desire to use up export quotas prior to the end of the year.

China’s exports of diesel jumped 11.5 percent in the first 10 months of the year, while those for jet kerosene surged 21.5 percent, according to official figures.

Gasoil exports from Asian producers, including China, are expected to be around 7.5-8.0 million tons in November, up from October’s 7.3-7.4 million, according to Refinitiv Oil Research, which tracks tanker movements and port data.


Virus sees Booking.com slash quarter of global staff

Updated 35 min 40 sec ago

Virus sees Booking.com slash quarter of global staff

  • The company warned that “up to 25 percent” of employees could go in what it called an “extremely difficult step”
  • Booking.com’s Amsterdam headquarters was expected to be among the sites affected

THE HAGUE: Online travel agency Booking.com said Tuesday it will cut up to a quarter of staff worldwide due to the ongoing coronavirus pandemic, leading to thousands of job losses.
The Amsterdam-based booking site, which employs around 17,500 people around the world, declined to give an exact number of posts that will be slashed, saying details would become clearer “in the coming weeks and months.”
But it warned that “up to 25 percent” of employees could go in what it called an “extremely difficult step.”
“The Covid-19 crisis has devastated the travel industry, and we continue to feel the impact as travel volumes remain significantly reduced,” the company said in a statement sent to AFP.
“While we have done much to save as many jobs as possible, we believe we must restructure our organization to match our expectation of the future of travel,” it added.
Booking.com’s Amsterdam headquarters was expected to be among the sites affected, Dutch media reports added.
Hard-hit by the slowdown in international travel resulting from the lockdown, Booking.com follows in the footsteps of other digital travel sites such as Airbnb and TripAdviser, which have also laid off around 25 percent of their workforce.
Booking.com applied in April for state support.
Last month it received some 61 million euros ($71.8 million) from the Dutch state, making it the third-largest recipient of support behind flagship airline KLM and Dutch Rail (NS), the ANP national news agency reported.
Founded in 1996, Booking.com has some 28 million listings on its website which is available in 43 languages.