Pakistan Oil & Gas_Cracks holding steady on hope of sustained rebound , (AKD Daily, Dec 09, 2020)
AKD Daily
Pakistan Oil & Gas: Cracks holding steady on hope of sustained rebound
- POL product cracks for second-half Nov’20 (11 trading days 12-26th) remained sticky - particularly for HSD (largest refining segment, 46%/44% of 1QFY21/FY20 output), despite underlying crude benchmarks inching higher (Arab Light during the period average at US$44.3/bbl up 14.1% over previous 14 days) fueled by COVID-19 vaccine efficacy and expectations of fiscal stimulus.
- HSD crack to Arab Light averaged US$+2.92/bbl remaining above 5MFY21 avg. of US$1.7/bbl but well below 5MFY20 of US$10.7/bbl, while the same measure for MS RON92 was considerably softer (US$0.01/bbl avg over period), remaining below 5MFY21 avg. of US$1.9/bbl and to its lowest point FYTD
- HSFO cracks moved firmly in the red, down ~96% over 28th Sept-11th Nov to US$-2.8/bbl (vs. 5MFY21/11MCY20 avg of US$-3.8/-6.4/bbl), with global power generation demand failing to materialize for this grade (180CST) and Asian HSFO supply expected to rise heading into 1QCY21 with refining run rates likely to inch higher following OPEC+ agreement on raising production from Jan’20 (refiners held run rates lower as COVID uncertainty and Govt incentives to curb
- Crude market participants remained overly optimistic regarding any pull-back in oil prices in the case of vaccine setbacks (production/supply interruptions) or delays in lifting of pandemic restrictions, with this fragile outlook quaking significantly if Brent prices climb above US$50/bbl, chipping away at the internal cohesion of OPEC+ and spurring significant increase in drilling from U.S. shale producers.
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Oil and Gas Development Company is a petroleum exploration and production (E&P) company in the Pakistan oil and gas sector. Co.'s principal activity is to explore, develop, produce and sell oil and gas resources and related activities. Co. also manufactures Gas, Liquefied Petroleum Gas, Crude Oil, and Sulphur. Co.'s major fields contributing in the aforesaid production of crude oil include Nashpa, Kunnar/KPD, Pasakhi, Sinjhoro and Rajian and for gas include Qadirpur, Uch, KPD, Nashpa and Dakhni. Co. carries out exploration and development activities on its own as well as in joint ventures with other oil companies.
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