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Shell Singapore seeks gasoline; fire-hit unit stays shut
[SINGAPORE] Royal Dutch Shell was in the Singapore cash market seeking two gasoline cargoes after emerging as a top buyer last month, traders said on Monday.
Shell is expected to restart a fire-hit refining unit at its 500,000-barrel-per-day (bpd) refinery in Bukom Island, Singapore, only late in the first quarter although a 'Stop Work'order was lifted more than a week ago, traders said.
The order, which was issued to Shell by the Ministry of Manpower on Aug. 25, is usually issued in cases where severe lapses in safety and health conditions pose an immediate danger to workers.
Shell shut a refining unit in July for maintenance but fire broke out during the maintenance period.
A spokeswoman declined to comment on the status of the unit. "For reasons of commercial confidentiality, we do not provide details about the operational status of individual units."
The oil major in December bought about 350,000 barrels of gasoline in the Singapore cash market for late December to January shipment.
This was close to 22 per cent of all gasoline trades done last month in the cash market. "There's definitely some support from the prolonged shutdown of the unit. The entire light ends market including naphtha, seem to be supporting the refining margins," said a Singapore-based trader.
Global demand for gasoline was unusually strong in 2015 pushing crack to high levels.
But eyes are on China where its refiners could raise gasoline exports to cash in on the crack value.