Gasoline prices spark political reactions across continents

Crude prices continued to rally, at 85.7 $/b at the prompt for ICE Brent Dec-21 contract, as Asian nations multiplied calls to oil producers to boost production, as gasoline pump prices soared in the East. Indeed, The Japanese prime minister urged oil producers globally to ramp up production over the weekend, as gasoline prices in Japan hit a 7 year high. The rise in refined product prices in the East has mostly to do with low refining runs in the region, as China runs were recorded at 13.7 mb/d in September, a 17 month low. Indeed, low import quotas for independents and constrained refined product exports have dented independent refiners’ throughputs. The trend seems unlikely to revert, as the last batch of import quotas released gives a limited Q4 volume to independent refiners. Gasoline and diesel cracks in Asia both rallied substantially last week, amid growing demand in re-opening economies in Indonesia, Vietnam and Malaysia. Firm diesel exports to the west also continue to support the fuel in the region. Total’s refinery in Antwerp has been the first player to announce the closure of its 40 kb/d hydrocracker unit due to high natural gas costs, further reducing the diesel and jet supply in Europe, which is a strong footing for diesel cracks to rally higher, amid continued high natural gas prices.