Caltex Australia starts extended Lytton shutdown

Market: Crude oil, Oil products
14/05/20

Refiner and marketer Caltex Australia has started the extended maintenance at its 109,000 b/d Lytton refinery in Brisbane, Queensland.

Maintenance at Lytton was originally planned to start in July. The work is likely to continue until mid-August as with the original plan, effectively more than doubling the length of the turnaround. But Caltex has not provided an actual restart deadline, with it dependent on market conditions.

Global fuel demand erosion caused by the inmpact of Covid-19 is expected to affect refining conditions for at least several months, said Caltex Australia interim chief executive Matt Halliday.

The demand and broader impacts of Covid-19 on its business have become more acute into the April-June quarter, Halliday said. "In the current environment we are seeing a weakened crude oil market, with increase in storage on water lifting crude and product freight rates."

Australian jet fuel demand is expected to be down 80-90pc during the period that travel restrictions remain in place, Halliday said. Preliminary data released this week showed passenger volumes almost 99pc below levels a year earlier.

Retail fuel sales volumes are down by 16pc for the year to April compared with the same period in 2019, he said. Caltex accounts for around a third of all retail fuel sales volumes in Australia.

Caltex reported a slight rise in refinery margins at Lytton, which is the firm's only refinery, to $4.83/bl in April, up from $4.62/bl in March and down from $10.96/bl in March 2019.

Sales from Lytton's production fell to 95,000 b/d in April from 104,000 b/d in March and down from 92,000 b/d in April 2019. The reduced production was a result of decisions to reduce the economic impact of the coronavirus because of weaker margins, Caltex said.

The average Caltex refinery margin was $4.86/bl during January-April, down from $8.32/bl in the same period in 2019. Sales from Lytton's production rose to 106,000 b/d during January-April compared with 101,000 b/d a year earlier.

By Kevin Morrison

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London, 3 May (Argus) — A core group of eight Opec+ members has agreed to accelerate, for a second consecutive month, their plan to unwind some of their production cuts, the Opec secretariat said Saturday. As it did for May, the group will again raise its collective output target by 411,000 b/d in June, three times as much as it had planned in its original roadmap to gradually unwind 2.2mn b/d of crude production cuts by the middle of next year. The original plan envisaged a slow and steady unwind over 18 months from April, with monthly increments of about 137,000 b/d. But today's decision means that the eight — Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan — will have unwound almost half of the 2.2mn b/d cut in the space of just three months. The decision to maintain this accelerated pace into June is somewhat surprising, given the weakness in oil prices and the outlook for the global economy. The eight's decision last month to deliver a three-in-one hike in May was seen as a key reason for the recent slide in oil prices, alongside US President Donald Trump's tariff policies. Front month Ice Brent futures have fallen by about $13/bl since early April to stand at just over $61/bl. But the eight today pointed to "current healthy market fundamentals, as reflected in the low oil inventories" as a key factor in its latest decision. It reiterated, as it has in the past, that the gradual monthly increases "may be paused or reversed subject to evolving market conditions." As was the case for May, delegates said that the main driver for the June hike was again a desire to send a message to those countries that have persistently breached their production targets since the start of last year — most notably Kazakhstan and Iraq, which each have significant overproduction to compensate for through the middle of next year. "This measure will provide an opportunity for the participating countries to accelerate their compensation," the secretariat said. This group of eight is due to next meet on 1 June to review market conditions and decide on July production levels. By Nader Itayim, Aydin Calik and Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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London, 3 May (Argus) — A core group of eight Opec+ members look set to today to accelerate, for a second consecutive month, their plan to unwind some of their production cuts, four delegates told Argus . As it did for May, the group would again raise its collective output target by 411,000 b/d in June, three times as much as it had planned in its original roadmap to gradually unwind 2.2mn b/d of crude production cuts by the middle of next year. The original plan envisaged a slow and steady unwind over 18 months from April, with monthly increments of about 137,000 b/d. But today's decision would mean that the eight — Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan — will have unwound almost half of the 2.2mn b/d cut in the space of just three months. The decision to maintain this accelerated pace into June would be somewhat surprising, particularly given the weakness in oil prices and the outlook for the global economy. The eight's decision last month to deliver a three-in-one hike in May was seen as a key reason for the recent slide in oil prices, alongside US President Donald Trump's tariff policies. Front month Ice Brent futures have fallen by about $13/bl since early April to stand at just over $61/bl. While Opec+ has said that it is acting to support an expected rise in summer demand, the decision to speed up the output increases once again appears to be driven by a desire to send a message to countries that have persistently breached their production targets — most notably Kazakhstan and Iraq. By Aydin Calik, Bachar Halabi and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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