(Add gasoline cracks)
By Muyu Xu
SINGAPORE, April 21 (Reuters) - The flow of Asia's spot
Middle East crude oil trade deals slowed this week after
refiners' margins hit multi-month lows, curbing buyers' appetite
for incremental supplies, according to trade and refining
sources.
Lacklustre trading this month could cause a build-up in spot
crude supplies, reversing a price recovery in Middle East
benchmarks earlier this month on expectations that the OPEC+
output cuts would tighten markets ahead of peak summer demand.
Spot premiums for Abu Dhabi's flagship Murban crude loading
in June slumped on Thursday to near 20-month lows after Thai
refiner IRPC skipped purchases in its monthly tender.
IRPC typically buys light sour crude, such as Murban and Das,
that yields more gasoil.
Earlier this week, Asian refining margins fell below $2 a
barrel, the lowest level since late October, dragged lower by
margins on refined products such as gasoil with a sulphur
content of less than 10 parts per million, which have slipped
back to levels last seen in January 2022 before the Ukraine war
broke out. Asian refiners are now adjusting output to produce more
gasoline than gasoil for better profits. But gasoline cracks
also plunged this week, to their lowest level since mid-January,
partly due to an expectation of supply increase from China. Spot crude purchases by China's Unipec, the trading arm of
Asia's biggest refiner Sinopec , also slowed this
month. Unipec bought just two June-loading Upper Zakum crude
cargoes in early April, trading sources said, well down from
about 20 cargoes of Middle Eastern crude per month early this
year.
The handful of spot deals done this week were also at much
lower prices compared with early this month, traders said.
Taiwan's Formosa Petrochemical Corp bought 2
million barrels of June-loading Oman at about $1.10 a barrel
above Dubai quotes. Just a week earlier, the crude was priced at
a premium of $1.90 a barrel, Reuters data showed.
Meanwhile, major Chinese refiners are increasing Russian
crude imports which hit record levels in March, while India's
purchases have also hit all-time highs, offsetting some demand
for Middle East crude.
With the weak margins, refiners are pondering run cuts
although some would still be ramping up output and replenishing
stocks to meet peak seasonal demand after maintenance outages in
the second quarter, traders said.
Looking ahead, refiners are waiting for June official
selling prices from Middle East producers to gauge the bulk of
their feedstock costs and refinery margins, two Asian refining
sources said, before deciding whether to lower operating rates.
(Reporting by Muyu Xu; Editing by Florence Tan, Kenneth Maxwell
and Susan Fenton)
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