TOP expects Q4/22 stock losses to ease from higher oil prices – refining profit recovery : InfoQuest

Mr revealed Nattapon Nopparatwong, Commercial Planning Manager, Thai Oil Public Company Limited (TOP), the performance trend for the fourth quarter of 2022 is expected to lose oil stock compared to the third quarter of 2022. Because oil prices have recovered moderately. or to the level of 90 US dollars / barrel GRM (GRM) and general GRM Should recover from 3Q22 as the Crude Premium is likely to decrease from the previous quarter. Although demand for main products, jet fuel and diesel, continues to increase.

In terms of the operational plan in 2023, production capacity will be maintained in the refinery business. He is expected to have a better run rate than this year. Because this year the refinery has been shut down for maintenance. But next year no maintenance work will close. The content of demand for oil next year will increase. This makes it possible to produce and sell fully in the country and the region as well.

petrochemical business Both aromatics and olefins it has a better trend Demand and supply situation slightly better make the overall performance of the business improve in the next year In addition, the power business will also improve from the construction of the TOP SPP Expansion power equipment project, and which will be completed in 2023.

Regarding the investment in 2023, the company will focus on investing in 2 main projects, namely the Clean Fuel Project (CFP) to be completed as planned. and investment in Chandra Asri which will expand production capacity and accelerate cooperation with PT Chandra Asri Petrochemical Tbk (CAP), Indonesia. to benefit more

Mr. said Nattaphon that the direction of crude oil prices in 2023 is expected to weaken slightly. or to the level of 90 US dollars / barrel Compared to this year’s average of the global economic recession Although many central banks continue to raise interest rates to control inflation. Including China continues to use open measures The city is closed to control COVID-19, causing the overall global economic growth (GDP) next year to decrease somewhat. The latest forecast is 2.7%.

Although the demand for oil in 2023 is expected to increase from this year by around 1.5 million barrels / day. on the supply side Still a factor supporting crude oil prices from OPEC, the main oil producer has a clear policy to maintain market balance. It has recently reduced production to 2 million barrels/day. To support the price of crude oil to a level of about 90 US dollars / barrel. Next year, OPEC is expected to increase production in line with improving demand. But it will be limited because OPEC’s spare capacity is only 3 million barrels per day. But those that will significantly increase production capacity. Producers outside OPEC or the United States are expected to increase by 2 million barrels per day.

The factor to keep an eye on is the European ban on crude oil from Russia starting on December 5, with many predicting that Russia’s production capacity will be partially affected.

“I think next year, supply and demand will be fairly balanced. At times, it can be a bit negative. Should see crude oil support price around 90 USD / barrel. Natthaphon said Mr

refinery market In the second half of this year, the GRM and Product Spread have weakened as conditions have eased. Previously affected by the unrest situation between Russia and Ukraine. As a result, the finished oil market is tight, while in 2023, GRM and yield spreads are expected to return to normal levels. But they will be able to stand above the pre-COVID-19 level, although next year it is expected that the production capacity of new refineries will enter the market significantly, totaling 1.5 million barrels / day. The delay from the year 2010-21 came from the time of the COVID-19 situation. But it can be seen that the general picture is close to the improving demand.

As for the Gasoline market, demand continues to recover. Mainly led by Asian countries, while the United States is expected to remain stable at 9 million barrels per day Gasoline stocks are considered low. because when entering the summer Or when there is a lot of driving, the spread of the Gasoline oil group’s product will be boosted.

next year’s pressure factors This is expected from the latest China has announced quite a few oil export quotas at the end of this year. and likely to continue using this policy in the next year as well But if you look at the second half of next year the economic situation including COVID-19 in China should improve better It is likely that oil exports will the regional market is decreasing.

While the jet fuel market (JET) expects the number of flights to continue to improve. As a result, the global demand for jet fuel will gradually increase. return to normal at the end of 2013-2014, and the pressure factor will come from China, which may also have an oil export quota

The diesel group has gained enough support. Current demand is already approaching pre-COVID-19 recovery and stocks are at very low levels. Or below the level of 5 years. In addition, during the month of February. Europe will ban the import of refined oil from Russia. As a result, the supply of diesel fuel in the global market is tight. The pressure factor is China’s oil export quota, which has increased in the 4th quarter of 2022, continuing into the 1st quarter of 2023.

For fuel oil, the spread is expected to recover from this period which is likely to be negative. Due to the increased demand in winter to use more fuel oil to generate electricity. Therefore, the demand for fuel oil next year will grow from this year onwards. The content of exports from Russia tends to decrease. from the subject of the ban It will come to support the fuel oil to recover better compared to this year.

At the same time, the domestic market next year demand for key products Overall it will continue to improve. Gasoline will grow about 8%, Jet will grow more than 50%. Although still unable to return to the original level Which has to wait for the number of tourists to return to increase.Diesel Expected to grow 1.5% from the previous base of 16% this year, being used to generate electricity during the a time of high gas prices in the global market.

Nattapon who added that Mr. aromatic market Still in a stressful situation Since there is a lot of new production capacity this year and next year, in PX and gasoline, the spread of these 2 products has not increased. olefins market segment Probably close to the aromatics market Or there is a lot of new production capacity, it can be seen that PE, PP will have a slightly higher production capacity than the demand This year’s Base Oil market has helped the group in good because the price of fuel oil is much cheaper than usual While next year, the price of fuel oil is expected to increase gradually. back to normal Including supply from Base Oil plants 2 and 3 which will start operating next year. It can cause some pressure in the group of Base Oil Spread.

By InfoQuest News Agency (21 Nov ’22)

Tags: TOP , GRM , Natthaphon Nopparatwong , oil price , Thai stocks , Thai Oil

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