As oil prices approach $100, refiner demand remains strong in Asia

Although oil prices have recently soared to nearly $100, they have had little impact
on demand from Asia's largest crude buyer.

Margins in diesel and gasoline production have risen to near-pre-pandemic levels
due to reduced global inventories.
Refineries in Asia are looking to continue to increase processing rates to benefit
from the surge in production margins.
As countries gradually ease anti-epidemic restrictions, the recovery in consumption has led to tighter crude oil supply, while Asia is more sensitive
to supply shortages.

Daphne Ho, an analyst at Wood Mackenzie, the world's leading energy research organization, said: "Refiners are not affected by high oil prices and inflation, and they are looking to increase processing speeds
.
She added that fuel shortages could continue into March or April
.

Refiners in India, the world's third-largest crude importer, are ramping up purchases in an effort to meet annual production targets
.
At least 18 of India's 23 refineries were operating at more than 100% of rated capacity last month, up from just eight in August last year; The average operating rate of these plants was 101 percent in December, compared to 87 percent
in August, people familiar with the matter said.
In addition, these refineries have been looking to buy more crude
in March and April.

A spokesman for SK Innovation, South Korea's largest refiner, said the company plans to increase utilization at its Ulsan refinery to 85 percent in the first three months of the year from 68 percent
in the previous quarter, due to a strong gasoline market.
The spokesman said one of the company's gasoline production units will operate at full capacity during the shutdown of the crude distillation tower due to planned maintenance, so it will have little
impact on its fuel production.

Formosa Petrochemical, Taiwan's largest refiner, plans to carry out maintenance work by April, and its processing speed will be limited
.
This follows a fire in one of the company's coking units, which led to a production disruption
until March.
Lin Keh-Yeh, a spokesman for the company, said the company plans to increase the operating rate
of the Maiyao Township refinery in May due to strong margins in the refining business.
"The margins are very good
now.
We expect this to continue into the first half of the year, as several refineries in Asia will undertake scheduled maintenance work
in the second quarter.
”