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Red-Hot Refining Margins in Asia Start to Cool as Demand Eases

  • Gasoline cracks have halved from June record as supply expands
  • FGE expects diesel margins will narrow further this quarter
Fuel nozzles at a gas station in New Delhi.
Fuel nozzles at a gas station in New Delhi.Photographer: Anindito Mukherjee/Bloomberg

Asia’s red-hot fuel markets are cooling off as demand starts to ease while refiners keep processing rates high, dragging down the industry’s margins across the region.

Returns from processing gasoline in Asia have sunk more than 60% from the record hit in June, while those for diesel have fallen about 25%, according to data compiled by Bloomberg. There may be further declines this quarter as refiners return from maintenance and new capacity comes online, boosting fuel supplies, FGE has forecast.