• Further to the recovering Libyan crude output and expanded pandemic lockdown in Europe, there is a growing consensus that group leaders Saudi Arabia and Russia will push for a freeze on current production cuts to support prices; thus, delaying the return of an additional 1.9 million b/d (MMB/D) of supply beginning in January. The prospect of OPEC+ action helped Dated Brent prices climb back to $40/bbl after trading below this territory early in the week. Dubai crude was also trading at similar level this week.

• For gasoline, Indian gasoline output in September increased around 10.3% month-on-month to 846,000 b/d due to a large jump in refinery runs, which was up by 13% from August to September to 4.39 MMB/D. It is expected to rise further to around 4.7-4.8 MMB/D in November/December as demand in the country likewise recovered 80% from the peak of lockdowns in April-May.² The rest of the country’s production are exported, as it increased by 13% to 279,000 b/d in September 2020.

• For gasoil/diesel, while the winter period is supportive of middle distillate values, Platts sees the outlook to remain flat partly due to diminished European demand resulting from COVID-19 lockdowns and mild temperatures forecasted for the northern hemisphere over the next few months.

  • Supply for gasoil is seen as relatively stable in Asia with increasing refinery runs after the conclusion of the October maintenance round. Asian refinery runs excluding China is seen to increase by about 400,000 b/d, still lesser compared to 1 MMB/D in November 2019.

  • Platts further noted that weak refining margin may keep gasoil supply constrained through the winter season. Singapore gasoil vs. Dubai crack remained little changed at $3.29/b. It is slightly higher than Singapore RON 92 vs. Dubai crack that dipped to $2.20/bbl during the week.

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¹ Purchasing Managers' Index -a reading above 50 indicates expansion in the sector; below 50 indicates contraction
² Platts Asia Pacific weekly recap, 06 Nov 2020