The profit margins of Asian oil refineries have plummeted to an all-time low of almost five months, amid concerns that the omigron strain of the corona virus could take another step to restore oil demand, which has already been hit by an increase in corona virus cases in Europe.
To prevent the spread of Omigran, first discovered in South Africa, governments around the world imposed restrictions on travel from South Africa over the weekend.
Scientists are betting that it could be more contagious or cause more severe symptoms than current corona strains.
As the profit margins of refineries in Asia and Europe have already been successful over the past few weeks, many European countries have re-imposed corona restrictions to curb the rising number of cases of Covit-19.
The International Energy Agency (IEA) expects dual power to divest the global economic recovery and weaken oil demand to 5.5 to 96.3 million barrels a day by 2021.
Hoi Lee, an economist at OCBC Bank in Singapore, said: “This is a setback at a time when many airlines are reopening.” We need at least two weeks to understand the impact of this new strain on oil demand, “he added.
Concerns about the Corona’s new strain caused oil prices to fall on Friday as oil prices fell more than 10%. Analysts said sales were high on Friday.
Refinitiv data show that Singapore’s total refinement for Asian refiners’ earnings was $ 2.15 per barrel on Friday, the lowest since June 30.
A month ago, margins rose to $ 8.45 a barrel, the highest since September 2019.
“We have seen a sharp decline in refining margins over the past few days due to concerns about the fast-spreading Omigron strain,” said an official at a major South Korean refinery. .
“We are facing a double impact in terms of refineries and lower oil prices, which will worsen our profits,” he added. The officer declined to be named because of the sensitivity of the matter.
Despite the weak forecast for jet fuel demand, some analysts expect petrol demand to remain stable for the time being because most governments have not imposed local restrictions on movement by the Omigron strain. “Demand for jet fuel will be greatly reduced, but I think petrol will remain the same,” said an analyst in Singapore, who asked not to be named because of the company’s policy.
“Europe is already moving towards lockout,” he said. So it’s about the United States and Asia (petrol demand). “
China’s strict border controls could exclude Omicron from the world’s largest oil importer, while lower prices could benefit Chinese refiners and consumers, said a Beijing – based consultant.
“This is bad news for the world, but it’s good for China because oil prices are so low,” said a China-based analyst who demanded anonymity because of the company’s policy.