SINGAPORE: Asia-Pacific condensate may receive a lift from tighter competing supplies from Qatar as the producer prepares to start trial runs for a second plant at the Ras Laffan condensate refinery.
Qatar will double its capacity for processing condensate by almost 150,000 barrels a day (bpd) in August when production trials begin for the Laffan Refinery 2 (LR2) plant, with commercial production starting by October, a Qatar Petroleum official said.
Condensate exports from Qatar will drop from the current 500,000 bpd to about 350,000 bpd when the new 146,000 bpd splitter starts operating, said the official, who declined to be named as he was not authorised to speak publicly.
"Overall, there should be less condensate supply in August, but it would still be enough for everyone considering how long the market was in July," a Singapore-based trader said.
However, product from the LR2 splitter could add to Asia's naphtha supply glut, further weighing on margins for the petrochemical feedstock.
Weak naphtha margins have led Australia's North West Shelf (NWS) condensate to trade at lower premiums of about $2 a barrel in July, down from $2-$2.50 the previous month, although steady demand from Indonesia capped losses. Woodside sold a cargo to Mitsui which was re-sold to Indonesia's TPPI, traders said. Shell bought BHP's cargo to supply to TPPI under a term agreement, they said.
Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS), fell 8 cents to $3.73 a barrel for August.
REFINERY
The top three refineries in Thailand will run at full volumes during the third quarter, despite weak margins, to compensate for a fall in output from a petrochemical plant that has been shut down for maintenance, executives said on Tuesday.
Japan's Idemitsu Kosan Co Ltd said on Wednesday it would refine the same volume of crude oil in June as a year earlier and will not export any oil products due to tight supplies from a refinery maintenance.
Strikes at five French refineries will continue until Friday and the start of the Euro 2016 football tournament hosted by France, to maintain pressure on the government over a contested labour reform, a CGT union official said.
MARKET NEWS
Oil bull Andy Hall's Astenbeck Capital Management fund rose 5 percent in May for a third straight month of gains as his bets on tightening oil supplies paid off to give the hedge fund its best stretch of returns in two years, an investor letter showed.
Royal Dutch Shell plans to increase cost savings to $4.5 billion following its $54 billion acquisition of BG Group which Chief Executive Officer Ben van Beurden said will make it the best oil company investment, ahead of Exxon Mobil.
Nigeria will scale down a military campaign in the oil-producing Niger Delta and talk to the Niger Delta Avengers militant group which has claimed responsibility for a series of attacks there that sharply cut crude output, officials said.
China's crude oil imports rose 38.7 percent in May from a year ago - the biggest jump in more than six years - to 7.59 million barrels per day (bpd), as the nation's independent refiners scooped up volumes and stockpiling maintained momentum.
The World Bank slashed its 2016 global growth forecast on Wednesday to 2.4 percent from the 2.9 percent estimated in January due to stubbornly low commodity prices, sluggish demand in advanced economies, weak trade and diminishing capital flows.
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