Recovering profit margins may prompt complex refiners to maximise yields of transport fuels, causing excess naphtha output as a byproduct in a tepid petrochemical market and further depressing feedstock margins.
Mandell expects margins to continue to perform well throughout the year heading into higher-demand crop planting season and into winter in the United States.
"The healthy margins reflect the bull market for diesel combined with still strong gasoline cracks even if gasoline did weaken sharply on week.
U.S. oil companies said during recent second quarter earnings presentations that strong global demand for fuels and low product inventories are driving robust profits.
"Global capacity additions continue to progress slower than anticipated, and we believe that global demand growth will remain strong," Hennigan added.
Persons:
Brian M, Mandell, Eugene Lindell, bullish HSFO, FGE's Lindell, Lindell, ENEOS, Phillips, Michael J, Hennigan, Mohi Narayan, Laura Sanicola, Ahmad Ghaddar, Jeslyn Lerh, Tony Munroe, Muralikumar
Organizations:
NEW, Phillips, Saudi, Reuters, Petronas, Hyundai, India's Reliance Industries, Oil, Marathon Petroleum, Marathon, Thomson
Locations:
NEW DELHI, WASHINGTON, Latin America, Asia, United States, Europe, Singapore, Malaysia, South Korea, U.S, New Delhi, Washington, London