Indian crude processing increases in April as low-cost Russian oil boosts returns.
According to government data released on Tuesday, Indian refiners’ April crude oil throughput was 8.5 % higher year on year, as refiners ramped up runs to take advantage of high returns from discounted Russian oil purchases.
According to the data, crude oil throughput last month was 5.27 million barrels per day (21.58 million tonnes).
“Refiners are buying cheap Russian oil as far as possible and then exporting high-priced diesel, particularly to Europe, where diesel prices have risen to astronomical levels,” said Refinitiv analyst Ehsan Ul Haq.
Diesel supply has become a global concern since sanctions against Russia reshaped fuel trade and sent international inventories to historic lows.
Data last week showed India’s April crude oil imports were the highest in 3-1/2 years mainly on the back of higher Russian flows to the world’s third larger importer and consumer of oil.
India’s purchase of Russian oil has surged ever since the invasion of Ukraine, at a time when Western sanctions have prompted many oil importers to shun trade with Moscow.
“Refiners are boosting their runs in order to profit from exceptionally strong margins… The refining business is a cyclical business and refiners have to take profits as long as high margins last,” Haq added.
Indian refiners operated at an average rate of 104.51% capacity, the government data showed. Refineries can operate at more than their usual capacity through technical alterations.
Top refiner Indian Oil Corp (IOC) last month operated its directly-owned plants at 108.32% capacity. Reliance, owner of the world’s biggest refining complex, operated its plants at 91.90% capacity in April.
However, crude oil production fell nearly 1% to about 603,000 barrels per day (2.47 million tonnes), the data showed. Natural gas output rose 6.6% year on year to 2.83 billion cubic metres, the release added.
U.S. new home sales tumble in April
Sales of new U.S. single-family homes fell more than expected in April likely as higher mortgage rates and prices squeeze out first-time buyers and those in search of entry-level properties from the housing market.
New home sales plunged 16.6% to a seasonally adjusted annual rate of 591,000 units last month, the Commerce Department said on Tuesday. March’s sales pace was revised down to 709,000 units from the previously reported 763,000 units.
Economists polled by Reuters had forecast new home sales, which account for a small share of U.S. home sales, would fall to a rate of 750,000 units.