180 views

SG refining margins to rise to $3-$4 per barrel in 2022: Moody's

Higher vaccination rates and eased movement restrictions drive demand for transportation fuels.

Singapore's refining margins will rise in 2022 from the the current average of nearly $1, according to a report from Moody's Investor Service.

"We expect Singapore's refining margins to rise to $3 to $4 per barrel in 2022 from the average of nearly $1 per barrel for most of 2021. Still, they will remain low in 2022 versus historical levels," said Moody's analyst Hiu Ting Sim. "The road to recovery will be bumpy as sporadic resurgence in infections could result in lockdowns. Low refining margins in 2020-21 have hit refiners, and we expect unprofitable refineries to eventually shut down or be converted to other purposes."

Asian refiners' margins, as a whole, are expected to increase in 2022 as eased movement restrictions and higher vaccination rates drive demand for transportation fuels.

Oversupply risks is expected keep a lid on the rise in refining margins. Refiners with higher complexity and downstream operations are more insulated from the squeeze on refining margins. 

"Even as energy transition plans come to the fore for Asian refiners, their financial capacity to invest will be constrained if refining margins remain low. Absent equity raising or asset sales, the financial leverage of companies seeking significant diversification with little immediate earnings accretion will be elevated if refining margins do not improve materially," the report read.

 

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Exclusives

C&W Services transforms headquarters into a ‘living lab’
The new office is set to be the ground for the firm’s new facilities management technologies.
How investor stewardship puts companies in a win-win state
Stewardship Asia Centre CEO says a company’s failure to take care of society is a failure to take care of its stakeholders.
Creating harmony in a heterogonous workforce 
An HR expert said tests like DISC can help identify which employees can work best together.