When oil prices declined sharply in early March, everyone hoped refining margins would get a boost thanks to lower procurement costs.
True, demand outlook was soft even at that time. However, lockdowns in many parts of the world owing to the covid-19 outbreak have worsened the demand outlook drastically in a short span of time.
The benchmark Singapore gross refining margin (GRM) is estimated to have averaged only $1.20 a barrel up to 27 March in the quarter, compared to $1.70 per barrel in the December quarter.
In fact, in the second half of March, the measure dropped into negative territory, largely owing to the collapse in demand for jet fuel.
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