Pakistan Oil & Gas: Cracks from falling crude, bi-monthly pricing positive,(AKD Daily, Oct 07, 2020)
- POL product cracks tracked higher in the second half of Sept’20, assisted by underlying crude benchmarks inching lower (14th-28th Sept Arab Light average at US$41.6/bbl down 4% over previous period) indicative of faltering global economic conditions post COVID-19, taking monthly HSD/MS crack vs. Arab Light to average US$-0.24/+2.3/bbl, diverging from 1QFY21 averages (US$+1.4/+0.6/bbl) and CY20TD averages (US$+4.4/+0.3/bbl).
- HSFO cracks sustained +7.6% over 28th Aug-11th Sept to US$-5.9/bbl (vs. 4QFY20/CY20TD avg of US$-2.9/-9.1/bbl), where bunker fuel demand destruction post IMO-2020 implementation, recent softness in crude prices have kept cracks firmly in the red.
- In terms of crude supply dynamics, OPEC+ members compliance with planned cuts have waned, with Russia remaining a major overproducer and core OPEC production can be seen to post three consecutive months of production rise reaching 24.4mn bpd in Sept’20. Upcoming meeting to revisit planned cuts is scheduled for 19th Oct’20
- Compared to the monthly ex-refinery pricing regime, the bi-monthly regime instituted from Aug’20, with pricing period now based on a lag of fourteen days (ex of weekends) on international refined product benchmarks can be seen to reduce volatility in pricing—a net positive for domestic refiners
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Co. and its subsidiaries are principally engaged in the exploration, drilling, production and sale of crude oil and gas and other products.
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AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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