Summary
The gasoline market has reached a bottom and has begun stabilising due in part to Hurricane Francine, which caused little damage, but the headline was enough to prompt some buying, it seems. Gasoline continued to drive poor sentiment in refinery margins in both regions, with only gasoil underperforming more. Two Sinochem oil refineries were declared bankrupt this week as the Sinochem Group indefinitely shut down two refineries in Shandong, China, due to high crude costs and weak fuel demand, which reflected poor margins and a sluggish economy. Unlike independent teapot refiners benefiting from discounted Russian, Iranian and Venezuelan crude, which, therefore, have been running at huge capacity, Sinochem faces higher costs, causing refinery utilization to hit a four-year low and a 2.3% decline in China’s crude imports in the first half of the year. Nov’24 RBBR reached a low of just above $7.00/bbl on 4 Sep and has strengthened to $9.00/bbl on 17 Sep. Will the market risk being long again after seeing such a risk-off month or two following the catastrophic start of the year (for some)?
