Australia’s oil product demand grew in October, by 61 thousand b/d y/y to 1.06 mb/d. Diesel led the gains, rising by 58 thousand b/d y/y to 0.51 mb/d, as iron ore exports to China increased amid rapidly falling stocks at Chinese ports, although a slowing Chinese economy will likely weigh on Australian exports going forward. Jet demand rose by 4 thousand b/d to 0.16 mb/d y/y, as the low value of the Australian dollar attracted tourists, with year-to-September arrivals up by 0.5 million y/y at 9.2 million (+5.6%). But gasoline demand fell by 9 thousand b/d y/y to 0.31 mb/d as a weak Australian dollar boosted gasoline prices at the pump, which peaked at AUD $1.605 (USD $1.15) per litre in the week to 28 October, according to the Australian Institute of Petroleum. November gasoline demand should have risen as pump prices fell by 14.1% m/m.
October refinery runs fell by 23 thousand b/d y/y to 0.46 mb/d, weighed down by an unplanned outage at Caltex Australia’s 0.11 mb/d Lytton refinery, dragging down diesel output sharply. Caltex warned that runs from the refinery could fall by 15% in H2 18 from H1. Product imports grew by 54 thousand b/d y/y to 0.70 mb/d, led by diesel, which increased y/y by 34 thousand b/d to 0.38 mb/d, mainly from Singapore. LPG exports gained by 10 thousand b/d y/y to 25 thousand b/d in October, with further growth expected. Indeed, November saw the first LPG cargo from the Ichthys project being sold to Wanhua Chemical in China. Ichthys also supported strong condensate production, with total liquids output rising y/y by 55 thousand b/d, the highest rate of growth on our records dating back to 2009. Australia’s total oil stocks rose m/m by 1.5 mb to 42.8 mb, with crude stocks rising by nearly 1 mb, although diesel inventories fell by 1.6 mb.