Refiners seek prompt oil cargoes as uncertainty deters advanced orders
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Sunday
February 05, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
SUNDAY, FEBRUARY 05, 2023
Refiners seek prompt oil cargoes as uncertainty deters advanced orders

Global Economy

Reuters
20 April, 2020, 12:20 pm
Last modified: 20 April, 2020, 12:44 pm

Related News

  • Oil falls about 3% as strong US jobs data prompt interest rate concerns
  • Oil heads for weekly loss awaiting China recovery signs
  • Oil climbs as dollar slumps, OPEC+ keeps output cut policy
  • Bangladesh proposes Saudi Arabia supply crude oil on deferred payment basis
  • Oil steadies after falling on rate hike worries, Russian crude flows

Refiners seek prompt oil cargoes as uncertainty deters advanced orders

Physical crude prices have been pummelled as measures to contain the pandemic have kept people at home and hammered demand for jet fuel, gasoline, diesel and other products

Reuters
20 April, 2020, 12:20 pm
Last modified: 20 April, 2020, 12:44 pm
FILE PHOTO: An entrance of the oil refinery of Eni is seen in Taranto, southern Italy, September 21, 2018. REUTERS/Alessandro Bianchi/File Photo
FILE PHOTO: An entrance of the oil refinery of Eni is seen in Taranto, southern Italy, September 21, 2018. REUTERS/Alessandro Bianchi/File Photo

Some oil refiners are picking up more crude cargoes at the last minute from locations nearby as uncertainty caused by the coronavirus outbreak discourages their more usual approach of making advanced orders, market sources said.

With little clarity about how long national lockdowns to prevent the spread of the virus will last and whether prices have further to fall, refiners are wary of longer-term deals.

Physical crude prices have been pummelled as measures to contain the pandemic have kept people at home and hammered demand for jet fuel, gasoline, diesel and other products.

"Buying anything but prompt barrels is like playing the lottery," a major East Asian buyer told Reuters.

Sellers have struggled to find buyers even on heavily discounted cargoes from West Africa or other producing areas that would mean a longer journey to major centres.

One Mediterranean refining source said his company usually ordered one or two months in advance for a cargo with a three-week travel time. "Now, we only take Mediterranean grades last minute that arrive in a few days," he said.

Another Mediterranean source said: "Many refineries need to plan short term as product demand is a moving target."

The price structure of the oil market has added to the challenges, tipping into heavy contango where spot prices trade below futures prices. This usually encourages oil to be stored for sale at higher prices at a later date.

"These ultra-low flat prices coupled with extreme market structures tend to make crude pricing even more complex given the different time stamps and benchmarks involved for different crudes," energy consultancy JBC said.

A record spread between oil futures contracts and dated Brent, the benchmark for pricing half the world's physical crude cargoes, has encouraged caution as traders try to work out when the market will stabilise.

In a bid to restore balance, OPEC and allies agreed to cut output by 9.7 million barrels per day (bpd), or almost 10% of global supply, in May and June. The United States and others also offered to pump less. But even this may not be enough when demand has slumped by as much as 30%.

Faced with an uncertain outlook, even rare buying interest draws a cautious response.

Indonesia's Pertamina said this week it planned to import more crude and fuel to take advantage of cheap prices. Traders said it had recently issued a tender to buy 2 million barrels every month in the second quarter.

But one regular supplier said: "It's tough to fix on prices for later in the year this far out."

World+Biz / Top News

Oil / oil refinery / oil market / Oil Business / Oil companies

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Oil’s New Map: How India turns Russia crude into the west's fuel
    Oil’s New Map: How India turns Russia crude into the west's fuel
  • Photo: Collected
    Adani’s power to come to Bangladesh in first week of March: Nasrul Hamid
  • Service exporters to get foreign currency retention quota facility
    Service exporters to get foreign currency retention quota facility

MOST VIEWED

  • Jerome Powell, chairman of the US Federal Reserve, speaks during a news conference. Photographer: Al Drago/Bloomberg
    When the Fed's suspected of bluffing, it has a problem
  • Why Pakistan is struggling to get another IMF bailout
    Why Pakistan is struggling to get another IMF bailout
  •  Gautam Adani, center.Photographer: Tomohiro Ohsumi/Bloomberg
    Billionaires from Hong Kong to Arkansas exposed to Adani crash
  • FILE PHOTO: The logo of the Securities and Exchange Board of India (SEBI) is pictured on the premises of its headquarters in Mumbai, India March 1, 2017. REUTERS/Shailesh Andrade/Files
    On Adani row, SEBI says it's committed to ensuring market integrity
  • A broker monitors share prices while trading at a brokerage firm in Mumbai January 15, 2019/ Reuters
    Indian watchdog tells investors markets stable despite Adani rout
  • Demonstrators wait in line after entering the Presidential Secretariat premises, after President Gotabaya Rajapaksa fled, amid the country's economic crisis, in Colombo, Sri Lanka July 10, 2022. File Photo: REUTERS/Dinuka Liyanawatte
    Sri Lanka marks independence anniversary amid economic woes

Related News

  • Oil falls about 3% as strong US jobs data prompt interest rate concerns
  • Oil heads for weekly loss awaiting China recovery signs
  • Oil climbs as dollar slumps, OPEC+ keeps output cut policy
  • Bangladesh proposes Saudi Arabia supply crude oil on deferred payment basis
  • Oil steadies after falling on rate hike worries, Russian crude flows

Features

Say it with Colours

Say it with Colours

8h | Mode
Photo: Courtesy

From 'Made in Bangladesh' to 'Designed in Bangladesh'

10h | Panorama
Google must adjust to a world where content is increasingly generated by AI. Photo: Bloomberg

Google will join the AI wars, pitting LaMDA against ChatGPT

7h | Panorama
The megaproject Rooppur Nuclear Power Plant has a debt of Tk90,474 crore. Photo: Courtesy

Projects funded with debt need to be selected prudently, and implemented timely

8h | Panorama

More Videos from TBS

ICB to withdraw Padma Bank Investment as return

ICB to withdraw Padma Bank Investment as return

29m | TBS Insight
Kiara Advani & Sidharth Malhotra's Wedding Update

Kiara Advani & Sidharth Malhotra's Wedding Update

29m | TBS Entertainment
Lack of coordination, policy biggest problems

Lack of coordination, policy biggest problems

4h | TBS Round Table
Industries panicked about continuing stresses on profitability

Industries panicked about continuing stresses on profitability

5h | TBS Round Table

Most Read

1
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

2
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

3
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

4
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

5
Belal Ahmed new acting chairman of SIBL
Banking

Belal Ahmed new acting chairman of SIBL

6
Photo: Collected
Startups

ShopUp secures $30m debt financing to boost expansion, supply chain

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]