Caltex Australia says its refiner margin has shown short-term growth but remains roughly half as strong compared with 2019 amid the coronavirus pandemic.
The company says its March refiner margin was $US4.62 per barrel – above the February figure of $US4.14 per barrel but significantly lower than March 2019’s price of $US8.67 a barrel.
However, Caltex says ongoing reliable operations saw refiner margin sales from production in March of 515ML, which was slightly above February’s 505ML and higher still than the same time last year.
Caltex Australia’s year-to-date refiner margin figure is $US4.87 per barrel but was $US7.53 per barrel by March 2019.
Caltex’s refiner margin represents the difference between the cost of importing a standard basket of its products to eastern Australia and the cost of importing the crude oil required to make that product basket.
The takeover target on Thursday restated that it would bring forward and extend the duration of the planned shutdown of its Brisbane-based oil refinery Lytton’s maintenance – now to begin in May – in response to the coronavirus crisis.
Caltex Australia stocks rose by 0.13 per cent to $23.56 by 1030 AEST.
The company has lost nearly a third of its value in 2020 and the wider energy sector has copped a battering amid the COVID-19 pandemic and an oil price war between Russia and Saudi Arabia.
Crude oil prices fell to an 18-year low overnight and Brent lost more than 6.0 per cent after the United States reported its biggest weekly inventory build on record, while global demand is expected to fall to quarter-century lows.
RBC Capital Markets oil and gas analyst Ben Wilson said the refiner margin of $US4.62 per barrel for March was “predictably weak”.
He said the company pointed to soft global demand for gasoline and middle distillates, largely due to responses to the coronavirus.
Mr Wilson said Caltex had reported Australian jet fuel volumes were down 80 to 90 per cent while wholesale diesel demand is relatively stable.
“We think this broader macro backdrop is unlikely to improve materially in the near term and so in that vein we support Caltex’s decision to bring forward Lytton turnaround and inspection work to May this year,” he said.
Mr Wilson said, from a balance sheet perspective, Caltex remained in a sound position.
Caltex Australia has been evaluating takeover offers from rival bidders Canada’s Alimentation Couche-Tard and Britain’s EG Group.
Extracted from Shepparton News