Refining margins of major refineries in China stayed nearly unchanged in the past two weeks on stable feedstock costs and product prices, C1 research showed.
Based on integrated ex-refinery prices of oil products, the margin for refining Daqing crude was minus Yuan 422/mt (or minus US$8.93/bbl), flat with two weeks ago. The margin for refineries processing Oman crude rose by Yuan 10/mt (US$0.23/bbl) to Yuan 196/mt (US$4.11/bbl).
The settlement prices of both Daqing and Oman crudes were unchanged in the period; meantime, integrated product wholesale prices were also steady.
Market sources predicted that the refining margins may fall if the government reduces oil product prices in early September on soft benchmark crude prices.
The window for downward adjustment in domestic oil product retail ceiling prices will open in early September, if the Brent crude prices stayed around US$109/bbl. C1 forecast.
C1 takes the ex-refinery price of 93-Ron gasoline to calculate the refining margin since May 2011 for the sake of a better reflection of refining margins.
Starting from Apr 21, C1 calculated the refining margins of Oman crude on the basis of integrated oil products wholesale prices according to mark-to-market principle, namely using C1’s assessment for the previous day’s CFR price of Oman crude as feedstock cost instead of mean price of the grade in the previous month, which could better reflect changes in international crude prices.
