South Korea turns to cheap spot crudes as glut grows
* S.Korea spot imports hit 32 pct in Jan-May vs 26 pct yr ago
* Spot purchases expected to rise in second-half of year
* Mideast accounts for 85 pct of total imports vs 82 pct yr ago
* S.Korea refiners running at 90 pct on strong processing margins
By Meeyoung Cho
SEOUL, July 2 (Reuters) - Refiners in South Korea, the world's fifth-largest crude oil importer, have stepped up spot purchases this year, buying at prices depressed by an oil glut as they run their plants at high rates to catch strong processing margins.
With the Organization of the Petroleum Exporting Countries (OPEC) and other producers keeping crude taps open in spite of soft global demand growth, tens of millions of unbought barrels have built up in floating storage sites and dragged down international oil markets.
Still, the profit earned on turning a barrel of Dubai crude into fuel have held at $7.50-$9 a barrel DUB-SIN-REF-MA this year - well above annual averages since at least 1997 - as crude benchmarks dipped to multi-year lows, sparking consumer demand for gasoline and naphtha.
"Refining margins are firm thanks to rising demand triggered by weak oil prices, which has supported higher throughput rates and spot purchases have increased to cover them," said a senior source at SK Trading International, owned by SK Innovation which also owns the largest South Korean refiner SK Energy. Continuación...