The “high price” gasoline engine is not to be missed! Asian refiners plan to increase exports to U.S.

The worsening supply crunch has sent U.S. gasoline prices soaring to “astronomical levels,” spurring Asian refiners to add more exports.

Gasoline prices rose above $4 a gallon for the first time in all U.S. states as the summer driving season approaches. JPMorgan forecast this week that U.S. gasoline could soar to a high of $6.20 a gallon by August, more than double its price a year ago.

Gasoline is replacing diesel as the main focus of fuel supply concerns, with a tightening market weighing on a global refining system that has been hit hard by the pandemic in the past few years. In Asia, gasoline profit margins have doubled since the end of March to more than $33 a barrel, slightly ahead of diesel, which has fallen from a peak in early May.

Dylan Sim, analyst at Fisher Global Energy (FGE), said:

“Currently with tight supplies in the Atlantic Basin, especially in the U.S., we should continue to see gasoline continuing to be shipped from Asia to the West. Sellers are mostly from India, where several major refiners have postponed planned repairs until August. until September.”

Asia’s gasoline supply deficit is expected to narrow to 9 bpd from 260,000 bpd in June as refineries resume production from maintenance and Malaysia’s Petrochemical Comprehensive Development Corp (PRefChem) refinery facility increases, the industry consultant said in a report. 110,000 barrels per day for the month. That should give refiners in the region more room to increase exports.

India’s gasoline exports are likely to come from private refiners such as Relais Industries and Nayala Energy, as the country’s state-run refiners are obliged to meet domestic demand. India’s gasoline exports jumped to a five-year high of 1.6 million tonnes in March, latest data showed, while domestic prices, which have remained unchanged since early April, are spurring refiners to export as much of the fuel abroad as possible.

A pick-up in Chinese demand and an acceleration in consumption elsewhere in Asia could limit the amount of gasoline that Asia can send to the United States. Crude processing in China fell to its lowest level in more than two years last month, but the figure could rebound quickly if China eases its coronavirus restrictions.

While Chinese demand has yet to recover from the hit to oil demand from the pandemic, fuel demand in South and Southeast Asia is recovering strongly as restrictions ease, said Max van der Velden, an analyst at Wood Mackenzie.

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