Asia Distillates-Jet fuel margins climb to highest in over two weeks

MOSCOW (MRC) -- Asian refining margins for jet fuel climbed on Friday to their highest in over two weeks, while cash differentials for the aviation fuel firmed to their smallest discounts in three weeks, said Hydrocarbonprocessing.

Refining margins, also known as cracks, for jet fuel rose to USD14.76 a barrel over Dubai crude in a fourth consecutive session of gains, hitting their strongest levels since Jan. 15. They were at USD14.24 a barrel on Thursday.

Jet cracks, which also determine the profitability of kerosene, are currently about 7 percent lower than at this time in 2018 as a warmer-than-normal winter has kept a lid on heating demand for kerosene this year.

Following two weeks of declines, jet margins have risen about 10 percent this week in their biggest weekly gain since July last year.

Cash differentials for jet fuel narrowed to a discount of USD1.36 a barrel to Singapore quotes on Friday, compared with Thursday's discount of USD1.42 a barrel.

The draw in Singapore middle distillate stocks this week has boosted sentiment further in the market, which is expecting supplies to tighten over the next few weeks, trade sources said.

Singapore onshore middle-distillate stocks declined about 5 percent to 11.8 million barrels in the week to Wednesday, Enterprise Singapore data showed on Thursday.

A likely surge in air passenger travel during the Chinese New Year holidays is expected to boost aviation fuel demand, while some regional refineries scheduled for spring maintenance over the next couple of months would curb availability of barrels, market watchers said.

Chinese New Year, known as Lunar New Year in many parts of Asia, is on Feb. 5-6 this year.

Meanwhile, refining cracks for gasoil with 10ppm sulphur content climbed to USD14.67 a barrel over Dubai crude during Asian trading hours, from USD13.89 a barrel on Thursday.
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MOSCOW (MRC) -- Shares of ExxonMobil have tumbled 12.5% since it last reported earnings results on November 2. Though shares were initially buoyed by the stronger-than-expected third-quarter results, investors soon turned their focus to the spiraling crude oil prices, which fell almost 40% in the October to December period, said the company.

Oil prices, however, partially recovered in the start of this year when Russia and OPEC countries slashed its production, as promised, from January 1. While US production continues to be at record highs, there is some respite as Saudi Arabia is also reportedly planning to peg its exports.

A slew of energy companies are scheduled to report results in the coming days – Royal Dutch Shell (RDSA) and ConocoPhillips (COP) will report on Thursday, January 31, while Exxon and Chevron (CVX) will post results on Friday. Earnings and expectations of these companies would set the tone for the energy industry in 2019.

Analysts expect Exxon to report earnings of USD1.05 per share on revenues of $74.18 billion. During the same quarter last year, the energy giant reported earnings of USD1.97 per share on revenues of USD66.5 billion.

Investors may expect to hear a lot about headwinds in both the upstream and downstream operations during the post-earnings conference call. Also, expect commentary on the economic slump in China and the impact of the trade tensions in the oil industry. In December, the Asian country reportedly witnessed a fall in both exports and imports.

Another key area to look out for is the commentary on the impact of the recently imposed sanctions on Venezuela’s state-owned oil company Petroleos de Venezuela (PDVSA). Though Exxon has already scrapped its operations in Venezuela, the embargo could dent its refining activities.
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MOSCOW (MRC) -- Chevron Corp said it would pay USD350 million to buy a refinery in Pasadena, Texas, from Brazilian state oil company Petrobras, confirming a Reuters report.

In addition to the 110,000-barrel-per-day (bpd) refinery, Chevron will take ownership of a 466-acre (188.5 hectares)complex on the Houston Ship Channel that includes storage tanks with capacity for 5.1 million barrels of crude oil and refined products, as well as 143 acres of additional land, the company said.

"This expansion of our Gulf Coast refining system enables Chevron to process more domestic light crude, supply a portion of our retail market in Texas and Louisiana with Chevron-produced products, and realize synergies through coordination with our refinery in Pascagoula," said Pierre Breber, executive vice president of Chevron downstream & chemicals.

Chevron, which reported a 150,000-bpd increase in shale production in the third quarter, has said it wants a second Gulf Coast facility to handle that crude and better supply its retail gasoline network. The Pasadena refinery produces mostly gasoline and distillates such as diesel.

The deal includes all of Petrobras subsidiary Pasadena Refining System Inc, which operates the refinery and tank farm and owns the adjoining property, and PRSI Trading LLC.

Once approved by regulators, the acquisition will become the second Gulf Coast refinery operated by Chevron and its only one in Texas.

Chevron, which reported a 150,000-bpd increase in shale production in the third quarter, has said it wants a second Gulf Coast facility to handle that crude and better supply its retail gasoline network. The plant produces mostly gasoline and distillates such as diesel.

As MRC wrote before, in May 2018, Chevron Products Company, a division of Chevron U.S.A. Inc., and Novvi LLC announced that they had entered into an agreement to jointly develop and bring to market novel renewable base oil technologies.
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MOSCOW (MRC) -- LyondellBasell Industries reported fourth quarter earnings that missed analysts' expectations on Friday and revenue that fell short of forecasts, said the company.

The firm reported earnings per share of USD1.79 on revenue of USD8.88B. Analysts polled by Investing.com forecast EPS of USD2.26 on revenue of USD9.77B. That compared to EPS of USD2.73 on revenue of USD9.14B in the same period a year earlier. The company had reported EPS of USD2.96 on revenue of $10.16B in the previous quarter.

For the year, LyondellBasell Industries shares are up 4.58%, under-performing the S&P 500 which is up 9.58% year to date.

On Thursday, DuPont reported fourth quarter EPS of USD0.88 on revenue of USD20.1B, compared to forecasts of EPS of USD0.87 on revenue of USD20.95B.

Sherwin-Williams earnings missed analyst's expectations on Thursday, with fourth quarter EPS of USD3.54 on revenue of USD4.06B. Investing.com analysts expected EPS of USD3.65 on revenue of USD4.08B


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MOSCOW (MRC) -- Saudi Aramco with its partner Total has announced the signing of a Memorandum of Understanding (MoU) with Daelim, a South Korean petrochemical company, as per the company's press release.

Under the MoU, Daelim is planning to build a new 80,000 tons state-of-the-art Polyisobutylene (PIB) plant, which is expected to come on-stream in 2024. This agreement is another step to drive Saudi Aramco’s petrochemicals growth strategy. This follows Saudi Aramco’s announcement in October 2018 to launch an engineering study to build a large petrochemical complex in Jubail.

The launch of the Front-End Engineering and Design (FEED) of the PIB plant will start in February 2019 and will be concluded in Q4 2019. The new petrochemicals facility will be using feedstock from the Amiral complex in Jubail, located on Saudi Arabia’s eastern coast. It is the first time that the PIB product will be developed in the Kingdom.

The facility’s location in Saudi Arabia will give Daelim access to competitive feedstock and energy, with large infrastructure, to better serve customers in the Middle East and markets across Europe and Asia.

This specialty chemical project will be part of the large-scale petrochemical complex of Amiral, located in the value park. It will be using Daelim’s PIB proprietary technology to produce a wide range of products in a single plant, from conventional PIB (CPIB) to highly reactive PIB (HR-PIB).

PIB is a high value-added chemical product and has a wide range of industrial applications such as adhesives, lubricants and fuel additives.

As MRC informed earlier, in October 2018, Saudi Aramco and Total launched engineering studies to build a giant petrochemical complex in Jubail. Announced in April 2018, the world-class complex will be located next to the SATORP refinery, operated by Saudi Aramco (62.5%) and Total (37.5%), in order to fully exploit operational synergies. It will comprise a mixed-feed cracker (50% ethane and refinery off-gases) - the first in the Gulf region to be integrated with a refinery - with a capacity of 1.5 million tons per year of ethylene and related high-added-value petrochemical units. The project represents an investment of around USD5 billion and is scheduled to start-up in 2024.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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