Sinopec is poised to benefit after industrial production and retail sales in China, the world's second-biggest oil consumer, expanded at their fastest pace since March. Jerome Favre / Bloomberg News
Sinopec is poised to benefit after industrial production and retail sales in China, the world's second-biggest oil consumer, expanded at their fastest pace since March. Jerome Favre / Bloomberg News

Refinery shutdowns fuel Asian oil margins



Oil-refining margins are rebounding from a five-month low in Asia as China's recovering economy feeds demand.

Adding to the upturn is the fact that maintenance at the world's biggest processing complex, run by Reliance Industries, threatens supply cuts.

The bounceback is helping Asian refiners after a surge in capacity reduced returns this year by 21 per cent. China Petroleum & Chemical Corporation (Sinopec)is among companies poised to benefit from further gains after industrial production and retail sales in China, the world's second-biggest oil consumer, expanded at the fastest pace since March, according to consultants including KBC Energy Economics and IHS.

"Chinese demand for refined products is set to increase next month ahead of the Lunar New Year, so product [profits] will improve," said Ehsan Ul Haq, a senior market consultant at KBC in England.

He forecasts the refining margin will average US$4.60 (Dh16) a barrel next month compared with $3.90 this month.

"At the same time, shutdowns at plants mean there will be lower supply and this is going to push margins up further."

The profit, or crack spread, from turning Dubai oil into fuels such as petrol and diesel has jumped more than fourfold since last month to $3.03 a barrel as of Tuesday, according to data compiled by Bloomberg. That is still down 62 per cent from this year's peak of $7.93 on August 10. The margin averages $4.15 a barrel this year compared with $5.26 in the same period last year.

The crack in Singapore for Dubai crude, the benchmark grade for Asia, has rallied after sliding as low as 72 cents a barrel last month amid plans by Reliance to close part of its Jamnagar complex in India, the world's biggest refining facility. Processors from Japan to Taiwan are idling units at plants with capacity of 2.7 million barrels a day, equivalent to about 9 per cent of Asia's demand.

The profit from making gasoil, or diesel, climbed 19 per cent to $19.78 as of Wednesday from a four-month low last month, according to data from PVM Oil Associates, a broker in London.

China's oil consumption will rise by 520,000 barrels per day (bpd) this quarter from the prior three months, equivalent to all of the global increase, the International Energy Agency estimated in its Monthly Oil Market Report this week. The nation's growth next year will be 310,000 bpd compared with 860,000 globally, said the agency, based in Paris.

"Oil demand in China started to recover in October as factories began producing goods to meet Christmas seasonal demand from overseas markets," said Victor Shum, a managing director at IHS.

"Asian refining margins should improve in December and January. The planned shutdown of one of Reliance's crude distillation units for maintenance in January will tighten supply." The rebound in margins may be short-lived as fuel output in China surges and new refineries start operations in Asia, according to Mr Ul Haq, who says profit will average $4.60 a barrel in the three months ending March. It averaged $4.67 in the same period last year, data compiled by Bloomberg shows. China's oil processing rose to a record 10.2 million bpd last month, the statistics bureau's data shows.

"Once demand eases a bit after the Lunar New Year, there is going to be enough supply of oil products in the market," said Mr Ul Haq. The Lunar New Year holiday starts on February 10.

China and India will increase refining capacity by 1.4 million bpd, out of global growth of 2.4 million, according to Morgan Stanley. Asia will account for 32 per cent of the world's capacity and become "increasingly more important to global oil balances", said Hussein Allidina, the head of commodities research at Morgan Stanley in New York.

China Petroleum & Chemical, Asia's biggest refiner, started a crude unit 10 days ago at its Maoming refinery that almost doubled the plant's capacity to more than 402,000 bpd. Sinochem Group plans to start a trial run at its new refinery in south-eastern China's Quanzhou city by the end of June with a capacity of 241,000 bpd.

Returns may also falter amid concern about the strength of the global economic recovery, said Sonam Udasi, an analyst at IDBI Capital Market Services in Mumbai.

China's exports, an indicator of world demand for goods, rose 2.9 per cent last month, customs data showed on Monday, compared with a median estimate of 9 per cent in a Bloomberg survey. Japan, the world's third-biggest oil user, sank into a recession in the second and third quarters, according to data from the cabinet office in Tokyo.

"At the moment, no one can really stick their neck out and say that global sentiment is set to improve so much that it will give a substantial boost to refining margins," said Mr Udasi.

Reliance Industries may shut a crude processor as well as naphtha and vacuum gasoil units for planned maintenance next month at the newer of its two plants at Jamnagar, two people with knowledge of the plans said. The facility, with a capacity of 580,000bpd, may be halted for two to three weeks, the people said, asking not to be identified. The two plants at the complex can process 1.24 million bpd.

Bharat Petroleum, India's second-biggest state refiner, shut a crude-distillation unit at its 190,000 bpd Kochi plant last month for maintenance.

Taiwan's CPC Corporation scheduled 40 days of maintenance on its 200,000 bpd Taoyuan Number 1 crude oil distillation unit (CDU) from last week, according to a company official who asked not to be identified. Formosa Petrochemical Corporation may halt its Number 1 CDU at its 540,000 bpd Mailiao plant in March for maintenance, said Tsao Ming, the company's president.

Japan's TonenGeneral Sekiyu KK idled a catalytic cracker at its 335,000 bpd Kawasaki refinery last month after a malfunction. The unit resumed last week, according to Kosuke Kai, a company spokesman.

SK Innovation Company, the owner of South Korea's biggest oil refinery, plans to shut two crude-processing units at its 840,000 bpd Ulsan facility for maintenance in March and in May, said a company official, asking not to be identified.

China may run its refineries below capacity and implement price reforms to prevent processing margins collapsing, according to Deutsche Bank. Expansions totalled 700,000 bpd this year and will exceed that next year to be more than twice as much as demand growth of 321,000 barrels a day, it estimates.

"We are not expecting refinery runs to ramp up by that amount given the demand outlook is more modest in comparison," said Soozhana Choi, the bank's chief oil strategist.

"One key development to watch will be steps to reform the fuel price, which will lead to a normalisation of refinery margins.

"Policymakers are expected to target a reasonable margin in light of the losses the sector has been incurring," he said.

PetroChina, the nation's second-biggest refiner, lost 30 billion yuan (Dh17.61bn) from crude processing in the first nine months of this year because of government price controls. Sinopec did not give a figure for its processing operation.

* with Bloomberg News

Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

Rating: 2/5

Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
  • Stay invested: Time in the market, not timing the market, is critical to long-term gains.
  • Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
  • Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
 
 
How to avoid crypto fraud
  • Use unique usernames and passwords while enabling multi-factor authentication.
  • Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
  • Avoid suspicious social media ads promoting fraudulent schemes.
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Dubai Bling season three

Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed 

Rating: 1/5

The specs
Engine: 4.0-litre flat-six
Power: 510hp at 9,000rpm
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Price: From Dh801,800
THE SPECS

Engine: 6.75-litre twin-turbocharged V12 petrol engine 

Power: 420kW

Torque: 780Nm

Transmission: 8-speed automatic

Price: From Dh1,350,000

On sale: Available for preorder now

If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
The specs

Engine: Four electric motors, one at each wheel

Power: 579hp

Torque: 859Nm

Transmission: Single-speed automatic

Price: From Dh825,900

On sale: Now

The biog

Favourite hobby: taking his rescue dog, Sally, for long walks.

Favourite book: anything by Stephen King, although he said the films rarely match the quality of the books

Favourite film: The Shawshank Redemption stands out as his favourite movie, a classic King novella

Favourite music: “I have a wide and varied music taste, so it would be unfair to pick a single song from blues to rock as a favourite"

The%20specs
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Kill%20Bill%20Volume%201
%3Cp%3E%3Cstrong%3EDirector%3C%2Fstrong%3E%3A%20Quentin%20Tarantino%3Cbr%3E%3Cstrong%3EStars%3C%2Fstrong%3E%3A%20Uma%20Thurman%2C%20David%20Carradine%20and%20Michael%20Madsen%3Cbr%3E%3Cstrong%3ERating%3C%2Fstrong%3E%3A%204.5%2F5%3C%2Fp%3E%0A
Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

Source: Federal Office for the Protection of the Constitution

The Sand Castle

Director: Matty Brown

Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea

Rating: 2.5/5

The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E77kWh%202%20motors%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E178bhp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E410Nm%0D%3Cbr%3E%3Cstrong%3ERange%3A%20%3C%2Fstrong%3E402km%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EDh%2C150%2C000%20(estimate)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ETBC%3C%2Fp%3E%0A
COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EAlmouneer%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Dr%20Noha%20Khater%20and%20Rania%20Kadry%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EEgypt%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3E120%3Cbr%3E%3Cstrong%3EInvestment%3A%20%3C%2Fstrong%3EBootstrapped%2C%20with%20support%20from%20Insead%20and%20Egyptian%20government%2C%20seed%20round%20of%20%3Cbr%3E%243.6%20million%20led%20by%20Global%20Ventures%3Cbr%3E%3C%2Fp%3E%0A
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The National photo project

Chris Whiteoak, a photographer at The National, spent months taking some of Jacqui Allan's props around the UAE, positioning them perfectly in front of some of the country's most recognisable landmarks. He placed a pirate on Kite Beach, in front of the Burj Al Arab, the Cheshire Cat from Alice in Wonderland at the Burj Khalifa, and brought one of Allan's snails (Freddie, which represents her grandfather) to the Dubai Frame. In Abu Dhabi, a dinosaur went to Al Ain's Jebel Hafeet. And a flamingo was taken all the way to the Hatta Mountains. This special project suitably brings to life the quirky nature of Allan's prop shop (and Allan herself!).

COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Clinicy%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Prince%20Mohammed%20Bin%20Abdulrahman%2C%20Abdullah%20bin%20Sulaiman%20Alobaid%20and%20Saud%20bin%20Sulaiman%20Alobaid%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Riyadh%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2025%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20HealthTech%3Cbr%3E%3Cstrong%3ETotal%20funding%20raised%3A%3C%2Fstrong%3E%20More%20than%20%2410%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Middle%20East%20Venture%20Partners%2C%20Gate%20Capital%2C%20Kafou%20Group%20and%20Fadeed%20Investment%3C%2Fp%3E%0A
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A

England v South Africa Test series:

First Test: at Lord's, England won by 211 runs

Second Test: at Trent Bridge, South Africa won by 340 runs

Third Test: at The Oval, July 27-31

Fourth Test: at Old Trafford, August 4-8

COMPANY PROFILE
Name: ARDH Collective
Based: Dubai
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
Total funding: Self funded
Number of employees: 4
From Zero

Artist: Linkin Park

Label: Warner Records

Number of tracks: 11

Rating: 4/5

Washmen Profile

Date Started: May 2015

Founders: Rami Shaar and Jad Halaoui

Based: Dubai, UAE

Sector: Laundry

Employees: 170

Funding: about $8m

Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures