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UPDATE 2-S.Korea's Oct crude imports rise on strong refining margins
November 23, 2011 / 7:41 AM / 6 years ago

UPDATE 2-S.Korea's Oct crude imports rise on strong refining margins

* Crude imports at 82.97 mln bbls vs 76.64 mln bbls yr ago

* Crude runs at 80.95 mln bbls, up 5.5 pct y/y

* Domestic oil product demand, exports rise y/y

* End-Oct private oil stocks at 69.74 mln bbls, up 9.7 pct y/y (Adds more details and quotes)

By Cho Mee-young

SEOUL, Nov 23 (Reuters) - South Korea’s October crude imports rose 8.3 percent from a year ago, biggest gain since July, on robust refining margins while a healthy regional demand for oil products is expected to keep shipments at elevated levels till the end of the year.

But traders cautioned that imports by the world’s fifth largest crude buyer could come under pressure early next year as refining margins are weighed down by a grim outlook for the global economy.

“We are currently buying crude for February next year and the import volume is slowing down due to weaker cracks including naphtha and fuel oil,” a crude oil trader at a Seoul-based refiner said.

“Cracks of oil products were very good in August and September, influencing our crude imports for November and December at that time.”

South Korea’s crude imports rose to 82.97 million barrels last month from 76.64 million barrels a year ago, state-run Korea National Oil Corp (KNOC) said on Wednesday. The import growth was the highest since July of this year when it showed a 13.5 percent of rise year on year.

South Korea’s year-on-year crude import growth hit a high of 20 percent in March, and stayed at 8 percent on an average for most of this year, according to the KNOC data.

Crude runs in October rose 5.5 percent year-on-year to 80.95 million barrels, with refinery profit margins hitting a year high of $5.67 a barrel in October.

RECORD-HIGH EXPORTS SO FAR THIS YEAR

Oil product exports gained 1.7 percent in October on the year to over 34 million barrels, and for the first 10 months of this year marked a 20 percent year-on-year rise to a record high of 335.36 million barrels, according to KNOC data.

Of the total exports in October, gasoline accounted for 4.9 million barrels, up 33.4 percent from a year earlier, while diesel exports surged 21 percent to 14.8 million barrels.

Jet fuel accounted for 5.4 million barrels, up 15.2 percent year on year.

Japanese and Chinese led the regional oil products demand.

“Japanese demand is expected to be strong till the end of this year as some of their refineries are not yet fully recovered since the quake in March,” an oil product trader at a Seoul-based refiner said.

China’s top refiners recently made rare diesel imports to cover domestic shortages of the power-generating fuel from regional refiners including South Korea’s S-Oil and Hyundai Oilbank, traders said earlier this month.

South Korea’s domestic demand for oil products last month was at 66.31 million barrels, up 0.3 percent year on year.

The country’s private oil inventories by the end of October stood at 69.74 million barrels, up 9.7 percent from a year earlier, the data showed.

The inventory level is equivalent to 32 days of consumption, the data noted. (Additional reporting by Iktae Park and Seongbin Kang; Editing by Himani Sarkar)

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