Refineries continue to benefit from the unbalanced market with margins supported by surprisingly robust oil demand and surprisingly strong supply. Relatively low crude oil prices are buoying global demand for jet fuel and other refined products. At the same time, weak crude prices are keeping refinery feedstock costs in check (JFI Aug.24’15). The crude surplus is in both the sweet and sour market with producers increasingly competing for market share. An average Brent price of below $50 since August has been stimulating global oil demand more than initially forecast, which is helping refiners to shake off a period of relative weakness, especially in October. Margins for gasoline softened but, with some delay, better cracks for naphtha, diesel and fuel oil in particular helped offset the lower income from gasoline in most regions. Improved margins were also supported by refinery maintenance, which is now coming to an end in the US and Asia. The combination of higher demand and refinery maintenance drained key product tanks globally, providing additional support for margins.
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