South Korea forecasts oil exports to fall in H2

South Korea’s exports of refined oil products are forecast to plunge in the second half of this year due to overseas rivals’ increased production and lower refining margins, the government said. The Ministry of Knowledge Economy forecast that the country’s exports of products such as gasoline, kerosene, diesel fuel, naphtha, bunker-C oil and jet fuel will fall 43.5% from a year ago to US$10.66 billion in the July-December period. In terms of volume, exports are projected to decline 12.9% from a year ago to 162 million barrels. The ministry attributed the expected fall to lower refining margins and slackened demand arising from an overall global economic slump, as well as stiffer competition from India, China and Vietnam. Refining margins refer to the difference in value between the products produced by a refinery and the value of the crude oil used to make them. Lower demand is also expected to cause the operational rate of local oil refineries to continue to fall in the coming months. The operational rate at domestic refineries stood at an average 87.0% in January before falling to 70% levels in May and June. (July 28, 2009)