Turkey’s Tüpraş revises expectations on falling demand, prices
ISTANBUL - Demirören News Agency
Turkish refinery company Tüpraş has revised its 2020 expectations amid the negative impact of the COVID-19 pandemic on oil demand and prices.
“Our 2020 expectations, which were disclosed on Feb. 12, are revised due to global pandemic of COVID-19’s negative impact on petroleum products demand and margins, as well as drop in Brent oil price,” the company said in its filing posted on the Public Disclosure Platform (KAP) website on April 21.
Tüpraş revised its 2020 production expectation down from 28 million tons to 24 tons, whereas it lowered its sales estimate from 29 million tons to 25 million tons due to decline in demand.
“As a result of these changes, our 2020 capacity utilization expectation is revised from 95-100 percent to 80-85 percent,” it said.
Tüpraş’s net refining margin expectation was revised from $4.5-$5.5 per barrel to $3-$4 per barrel, according to the statement.
The company also decreased its refining investment expectation from $200 million to $125 million.
“During the preparation of the expectations above, it has been assumed that Covid-19’s negative impact on crude oil and petroleum products demand will begin to decrease by June and normal economic activity will resume starting from August,” said Tüpraş.
Tüpraş has four refineries in the northwestern industrial province of Kocaeli, the Aegean province of İzmir, the Central Anatolian province of Kırıkkale and the souhteastern province of Batman with a total crude oil processing capacity of 28.1 million tons per year.
Pump prices down in Turkey
The gasoline pump price is expected to decrease as low as 4.82 Turkish Liras (69 cents) per liter in Istanbul as of March 23, according to local media.
The Energy Petroleum Gas Refueling Station Employers Union announced that the gasoline prices would be decreased 0.31 liras on average.
Pump prices of gasoline and slightly more expensive diesel fuel are expected to decrease below the threshold of 5 liras in Ankara too.
Gasoline prices across Turkey were floating around 6.95 liras (neraly $1.1) at the beginning of March, when 1 dollar was traded for around 6.24 liras.
Brent oil falls below $16
The European benchmark Brent oil hit a two-decade low yesterday as the battered crude market dominated sentiment, while the dollar struggled and stock markets managed slight gains.
Brent North Sea crude for delivery in June, fell to $15.98 per barrel - the lowest level since June 1999, before recovering some ground.
The prospect of supply outstripping demand for several months, at least, led to two of the wildest oil trading days in history this week. The nearby U.S. contract fell into negative territory for the first time ever on April 20.
“Be prepared for more surprises in this broken oil market,” said Rystad Energy’s head of oil markets, Bjornar Tonhaugen.
Yesterday’s low for Brent took prices back to a time when OPEC was also tackling a supply glut and business and consumers were concerned - unnecessarily as it turned out - about the Millennium Bug affecting computers after the turn of the century.
Although major oil producers branded as OPEC+ countries agreed this month to reduce output by 9.7 million bpd, starting from May, they are already considering further steps.
Saudi Arabia on April 21 said it was ready to take extra measures with other producers. Iraq made similar comments, although the next formal OPEC+ meeting is in June.
The United States and other countries also said this month they would pump less, bolstering efforts by OPEC+.
