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Formosa Petrochemical Maintains High Utilization, Bullish on Diesel and Gasoline Spreads
Energy Minerals · Oil Refining/Marketing · economic_daily · 2026-09-08
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Formosa Petrochemical reports a 94% refinery utilization rate for September, projecting strong fuel spreads due to tight global supplies and low inventories.
What Happened
Production Capacity: Formosa Petrochemical achieved a 94% refinery utilization rate in September, processing 508,000 barrels per day. The company expects an average utilization rate of 91% for the third quarter, supported by the restart of its OL#3 cracker.
Oil Price Outlook: While geopolitical tensions have impacted oil prices, the company anticipates potential downward pressure as Middle Eastern oil exports stabilize. Management remains cautious regarding the duration of current supply disruptions.
Diesel Market Dynamics: Tight supplies in the Atlantic basin and ongoing Russian export restrictions continue to drive diesel spreads higher. With Middle Eastern refineries yet to return to full capacity, diesel margins are expected to remain significantly above historical averages.
Gasoline Market Outlook: Low U.S. gasoline inventories and logistical constraints at the Panama Canal are supporting market fundamentals. Despite the seasonal slowdown, structural shifts in global exports are expected to keep Asian gasoline spreads resilient.