C1 Energy (Shanghai) – Mar 10, 2010 －－－Major refineries in China could embrace 6-month high refining margins early March as rises in crude costs lagged those in international crude prices, C1's survey found.
If calculated on the basis of integrated oil products wholesale prices, margin for refining domestic Daqing crude was Yuan 412/mt (equivalent to US$7.79/bbl) on Mar 10, surging Yuan 343/mt from two weeks ago; that for those refineries processing Oman crude, a representative of imported crude, swelled Yuan 306/mt to Yuan 762/mt (equivalent to US$14.99/bbl).
Computed with ex-refinery prices for oil products, the margin for refining Daqing crude was Yuan 149/mt (equivalent to US$2.92/bbl), up Yuan 256/mt; that for refineries processing Oman crude increased Yuan 177/mt to Yuan 542/mt (equivalent to US$10.65/bbl).
Oil product wholesale prices went into uptrend in China early March, in the wake of recent spikes in international crude prices; however, ex-refinery prices of oil products were still laggard and those of naphtha and LPG even dropped in the period.
The half-year high refining margin is estimated to decline in April, when rises in crude prices would be reflected in feedstock costs of the refineries.
The refining margins were calculated on the basis of front month settlement price of Daqing crude and the previous month's CFR price of Oman crude.
State-owned refineries saw refining margins fluctuating after new oil product pricing mechanism took effect in 2009, which prescribed the minimum price adjustment period was 22 working days.
