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Oil refiners face dilemma as surging freight costs kill margins

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Oil refiners hoping for some fourth-quarter gravy are facing disappointment as surging freight rates inflate the cost of buying crude.

US sanctions on Chinese shipping companies and Friday’s attack on an Iranian tanker have turbo-charged transport costs, with rates on the Persian Gulf to China route at almost six times this year’s average. That’s slashing the margins of refiners, who had been anticipating a boost in profitability due to cleaner ship-fuel rules set to take effect next year.

Complex refining profits in Singapore tumbled to $2.91 per barrel on Friday from as high as $10.28 on Sept. 17, according to data from Oil Analytics. Margins are near the lowest for this time of year over the past five years, based on assessments against Dubai benchmark crude, after being above the highest level last month.

Crude processors are now faced with a dilemma: to buy and ship crude at much higher prices and risk low or no profits, or to cut operating rates and jeopardize supply of fuels over winter.

“Overall, refinery margins aren’t terrible when considered against oil benchmarks such as Dubai or Brent, but I can see why some refiners may consider run cuts once you add physical oil premiums and freight costs,” said Nevyn Nah, an oil analyst at Energy Aspects Ltd.

Refiners are more likely to tap their existing inventories for feedstock, rather than reduce run rates as we approach the year-end when fuel demand peaks, Nah said. Using up stockpiled oil has the added benefit of lowering taxes that are typically slapped on crude hoards at the turn of the year, he said.

When calculated against Saudi Arabia’s Arab Medium oil, Singapore complex margins fell to a deficit of $1.58 a barrel on Friday, the lowest in data going back to 2008. On a seasonal basis, processing returns are about $1.80 below the lowest level over the last five years.

Returns from breaking down crude into products such as plastics, gasoline and diesel typically peak in the last three months of each year due to consumption over winter, prompting processors to increase operating rates. The cleaner ship-fuel rules, known as IMO 2020, were expected to benefit refiners by causing a shift toward more high-quality fuels that fetch higher prices.

“The second half of this year was supposed to look better for refiners, especially with seasonal demand,” said Will Sungchil Yun, a commodities analyst at HI Investment & Futures Corp. in Seoul. “But the sudden spike in freight rates is definitely a burden” and discussions on potential run-rate reductions may start to take place, he said.

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Business

Delhi: Businesses can now remain open 24×7, over 300 applications cleared by L-G

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Photo by Rehan Fazal on Unsplash

From restaurants to transport services and BPOs to online delivery services, all those who apply for exemptions will be allowed to operate 24×7 in Delhi starting next week, with Lieutenant Governor V K Saxena approving the proposal to exempt 314 such places to operate all day long, some of them pending since 2016, officials said.

“The L-G has directed that notification to this effect be issued within seven days. The decision of providing exemption under Sections 14, 15 & 16 of the Delhi Shops & Establishment Act, 1954, is expected to boost employment generation and promote a positive and favorable business environment that is a prerequisite for economic growth. The decision will also provide a fillip to the much desired ‘nightlife’ in the city,” said an official.

Source: IndianExpress

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Business

Swiggy Instamart figures, Mumbaikars ordered 570 times more condoms in the last one year

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Customers are also ordering medical-related things through online shopping platforms. In metros like Mumbai, Hyderabad, Delhi, and Bangalore, people are buying goods online in large numbers. People living in metro cities including Bengaluru, Delhi, and Mumbai ordered an average of 6 million eggs in the last year.

These days people are doing online shopping fiercely in the country. Through Grocery Service Platforms, the goods of need are easily reaching people’s homes. From vegetables to medicines, just a few clicks on the smartphone are reaching people’s doorsteps. According to a survey, Swiggy Instamart has provided service to more than 9 million users between June 2021 and June 2022. In metros like Mumbai, Hyderabad, Delhi, and Bangalore, people are buying goods online in large numbers.

Healthcare products orders

Customers are also ordering medical-related things through online shopping platforms. According to a survey, Mumbaikars have ordered 570 times more condoms in the last 12 months. At the same time, in 2021, Instamart received orders for about two million sanitary napkins, menstrual cups, and tampons. Apart from this, a lot of orders have also been received for grocery items.

56 lakh packets of noodles ordered

According to the survey, between April and June last year, there was a 42 percent increase in the demand for ice cream in these metro cities. It was also learned that most of the orders were placed after 10 pm. In metro cities, people have ordered 5.6 million packets of instant noodles. In Hyderabad, users ordered around 27,000 bottles of fresh juice during the summer months.

60 lakh eggs ordered

The demand for eggs has increased manifold in the last two years. People living in metro cities including Bengaluru, Delhi, and Mumbai ordered an average of 6 million eggs in the last year. According to the report, customers from Bangalore and Hyderabad ordered the maximum number of eggs for breakfast. At the same time, people of Mumbai, Jaipur, and Coimbatore have ordered the maximum number of eggs online at the time of dinner.

Demand for dairy products

There has been a huge jump in orders for both tea and coffee. According to the report, there has been an increase of 2,000 percent in its demand. At the same time, 3 crore orders of milk have come for milk. People from Bangalore and Mumbai have placed more orders in the morning. Regular milk, full cream milk and toned milk are the most ordered dairy products.

Ordering fruits and vegetables

Orders for 62,000 tonnes of fruits and vegetables have been received in the last year. With 12,000 orders, Bengaluru tops the list of organic product buyers. At the same time, Hyderabad and Bangalore together have ordered more than 290 tonnes of green chilies in 12 months. Over 2 lakh orders have been received for bathroom cleaners, scrub pads, drain cleaners, and more in the last year.

Source: Aajtak

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Zepto, 10-minute grocery delivery app, raises $100 million

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Only five months subsequent to dispatching, 10-minute basic food item conveyance application Zepto on Tuesday reported it has raised $100 million driven by Y Combinator, taking its valuation to $570 million.

Other than the raise money, Zepto has been developing staggeringly rapidly and is significantly increasing its client base consistently.

In the course of recent months, Zepto has extended past Mumbai by dispatching in Bengaluru, Delhi, Gurgaon, Chennai, Hyderabad, and Pune (Kolkata to follow), the organization said in an assertion.

“Financial backers are reliably deciding to back Zepto due to our top tier execution. This is giving us extraordinary energy – we’re developing at an amazing rate, clients are adoring the item experience, our center unit financial matters are solid, and we have one of the most outstanding startup groups in India today,” said Aadit Palicha, Co-Founder and CEO.

The Series C raising money round saw support from new and existing financial backers, including Glade Brook, Nexus, Breyer Capital, Lachy Groom, Global Founders Capital, Contrary Capital, and that’s just the beginning.

The round came 45 days later the organization reported its $60 million raise money in November.

Conveying food in a short time is a game-changing encounter for clients in the nation, and a few players are presently joining the race.

“We are eager to twofold down and lead this round in Zepto. They initially dispatched with an alternate model, quickly turned to speedy trade in August 2021, and are presently adding 100,000 new clients consistently, 60% of the ladies,” said Anu Hariharan from Y Combinator.

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