Saudi Arabia – After the attack

Over the weekend, drones attacked  the world’s most important crude processing facility at Abquaiq and the nearby oil field Khuras, on Saturday morning. Brent crude futures jumped to as high as $ 71 / bbl before retracing to around $ 66 /bbl at the time of writing. In the midst of all the uncertainty prevailing in the region, we attempt to examine what is at stake, what are the most crucial short term and long…

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What does the resumption of US China trade talks mean?

Crude Prices have jumped nearly 2.5% with September Brent trading at $ 66.30 at the time of writing. This jump has come on the back of two events over the weekend namely, the agreement of US and China to resume talks and the agreement of OPEC + to extend production cuts. We shall take a look at both events in a little more detail and examine their impact on global prices US – China trade…

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Middle Distillate Cracks – Is the strength here to stay?

Over the last few days, gasoil cracks have been strengthening quite significantly. The July gasoil crack has increased from a value of around $ 14.25/bbl at the start of the month to almost $ 16.00 /bbl today. In this background, we take a look at what is happening fundamentally.     There are essentially 3 drivers to the growth in the refining margin (crack) of a product. These are Fundamental spot demand This would manifest…

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Implication of Falling Margins

Below is an ongoing chart of the next month’s margins. This is based on Some standard product profile for a Hydro-Skimming and Cracking Refineries First full month crack value, i.e. for the month of May 19, this charts the refining margin basis some fair values for cracks for June 19. We can see that the margin for a hydroskimming refinery has dropped below $ 3 / bbl for the first time in the last 6…

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