Page 152 - CW E-Magazine (3-10-2023)

Hydrocarbons

over alternate fuels, a testament of which economic environment. The demand result in volatility in the spot prices,”
is the strong uptick in CNG vehicle sales from Japan and South Korea was also added Mr. Majumdar.
in the last couple of years. tepid owing to their increased focus
on the use of renewables and nucle- Given the lack of investments in the
Lower global prices ar power. On the other hand, the US LNG projects over the past few years,
Globally, the LNG prices modera- domestic demand has also witnessed incremental availability of LNG will be
ted in CY2023 after achieving life-time subdued growth, and with healthy gas capped with major capacity additions
highs in CY2022, aided by changes in inventory levels, the Henry Hub prices expected in FY2025-26. Meanwhile,
demand patterns across the key con- have moderated. structural changes are underway on the
suming nations. The LNG demand demand front, such as the increasing
from China has been subdued amid an “Soft LNG prices bode well for the focus of the EU on renewable energy, a
economic slowdown, rising pipeline Indian gas consumers. However, event shift towards coal usage by China, and
fl ows from Russia, and increasing use risks persist, like an extended labour increasing reliance on nuclear power
of coal. The EU demand stabilised strike in Australian LNG facilities by Japan and South Korea. The LNG
after the initial peak, owing to mild and a colder-than-expected winter in offtake by South Asian countries
winters, austerity measures, and a weak the northern hemisphere, which could remains highly price sensitive.
TRADE TRENDS

Diesel, ATF and fuel oil pull up petroleum products

exports by 9% in August

India’s exports of refi ned petroleum “Further, the domestic consump- August with outbound shipments rising
products rose by almost 9 percent month- tion of diesel has been lower in July 15 percent m-o-m to 900,000 tonnes
on-month (m-o-m) to 5.83-million tonnes and August as compared with previous last month.
(mt) in August 2023 largely supported months as monsoon restricted mobility
by outbound shipments of diesel, avia- and demand from the farm sector to an “The international product prices
tion turbine fuel (ATF) and fuel oil. Accor- extent. The international gasoil prices of ATF were on an increasing trend in
ding to the Petroleum Planning and have been increasing in the ongoing the last few months resulting in healthy
Analysis Cell (PPAC), petroleum pro- quarter on account of seasonal issues product cracks. The product cracks
ducts exports in August were the high- such as refi nery outages and mainte- for ATF were signifi cantly higher in
est in FY24 and the second highest in nance, amid increased temperatures August 2023 compared to June and July
the current calendar year. across the US and Europe,” Mr. Vasisht 2023. ATF crack spreads witnessed
explained. Besides, the sanctions on an uptick in the last few months with
“The product exports increased to Russian refi ned products to Europe improved demand owing to increase
5.8-mt in August 2023, higher than 5.4-mt with effect from February 2023 have in overall air travel activity even as
in July 2023 and 5-mt in June 2023. also impacted supplies. Moreover, refi nery output declined in a few months
The increase in products exports was OPEC+ cut on production reduced due to maintenance activity,” Mr. Vasisht
on account of higher diesel, ATF and diesel-rich crude in the market leading said. Similarly, exports of fuel oil,
fuel oil exports,” informed ICRA Vice to lower production of diesel globally, which is also called industrial fuel oil,
President & Co-Group Head (Corpo- he added. However, exports of the other have more than doubled on a monthly
rate Ratings) Mr. Prashant Vasisht. auto fuel, gasoline, fell in August. basis to 300,000 tonnes in August 2023.
Petrol exports declined by 6.7 percent After a subdued start in April its ship-
Diesel cracks m-o-m to 1.17-mt in August, which ments have risen consistently in the
India’s diesel exports rose 4.2 per- ICRA attributed to the tapering of the next four months.
cent m-o-m to 2.48-mt in August 2023 summer driving season in the northern
as higher diesel crack spreads sup- hemisphere. Mr. Vasisht attributed the higher
ported higher exports. A crack, or crack exports to lower production of fuel
spread is the overall pricing difference Growing air travel oil globally because of production
between a barrel of crude oil and the The export of jet fuel continued to cuts of heavier grades of crude oil
petroleum product refi ned from it. rise for the fi fth consecutive month in by OPEC+.

152 Chemical Weekly October 3, 2023

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