But dramatic run cuts at refineries are unlikely despite new mega refineries coming up this year in Malaysia and China. "Although talks about refinery run cuts have surfaced in the recent weeks, we believe that very little will actually be cut," said a note by consulting firm FGE this month. "We understand refiners have lowered FCC utilization rates wherever possible, but high crude runs are still supported by strong simple margins," FGE said. It added that possible heavy refinery turnaround in the first half of 2019 combined with higher summer demand could help soak up some of the product surplus.
Refinery news: South Korea's GS Caltex is expected to shut an 180,000 barrels-per-day (bpd) crude unit from May 1 to early June and a gasoline-making unit from late April for about two months among other units scheduled for planned maintenance. Gasoline inventories: Singapore's onshore light distillates, which comprise mostly gasoline and blending components for petrol, eased 0.2 percent, or 37,000 barrels, to reach a three-week low of about 15.4 million barrels in the week to Jan. 16, data from Enterprise Singapore showed.
The current inventories in Singapore are more than 10 percent higher than a year ago. Gasoline stocks in Japan in the meantime were at an eight-week high of 11.4 million barrels in the week to Jan. 12, official data showed.
Naphtha: Traders said South Korea's LG Chem's purchase of naphtha for first-half March delivery in the previous day, at a premium of above $1 but below $2 a tonne to Japan quotes on a cost-and-freight (C&F) basis, was likely pegged to a 45-day pricing formula instead of the usual 30 days. Japan imported 1.31 million tonnes of naphtha in December, highest monthly volume since January 2018.
This also brought Japan's naphtha imports for 2018 to a total of 13.86 million tonnes, down 2.6 percent from a total of 14.23 million tonnes in 2017, as heavier maintenance last year ccould have weighed on imports Kuwait's Port Authority has temporarily halted shipping at the Shuwaikh, Doha and Shuaiba ports because of bad weather, but oil ports were unaffected.