Gross Refining Margin (GRM) averaged $3.90/bbl during February 2020, reflecting a year-on-year increase of $0.29/bbl or 8 percent. This marginal gain was supported by MS and HSD margins which were up by 366 percent and 70 percent respectively.

"Cut in refinery runs over the month triggered some bullish sentiment in the above two products," Arsalan Ahmed, an analyst at JS Global Capital said. On the other hand, Furnace Oil (FO) posted a massive decline of 257 percent amid a growing bearish sentiment around consumption of this product after implementation of IMO 2020, he added.

Product wise, the highest decline after FO was seen in Light Diesel Oil (LDO), which posted a decline from $9.60 in February-2019 to negative $0.14 in February-2020.

On a sequential basis, average GRM increased by 35 percent on month-on-month basis during February-2020. Among the categories, on month-on-month basis, LDO, HSD, MS and FO up by 36 percent, 14 percent, 9.0 percent and 1.0 percent respectively while Jet fuel crack spread declined by 14 percent.

Copyright Business Recorder, 2020

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