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To: Bobby Yellin who wrote (33789)	5/13/1999 7:32:00 PM
From: goldsnow	Respond to of 116768

Korean Refinery Fire Boosts Asian Prices 06:07 a.m. May 13, 1999 Eastern SINGAPORE (Reuters) - A fire in a key unit of South Korea's Ulsan oil refinery, the world's biggest, sent Asian gas oil prices soaring Thursday. SK Corp, which operates the Ulsan refinery which has official capacity of 810,000 barrels per day, said Thursday a fire broke out at a 30,000-bpd unit making kerosene and gas oil. The news sent gas oil prices on Singapore's over-the-counter swaps market surging more than three percent soon after the news broke. The shutdown means the refinery will produce less kerosene and diesel. June gas oil swaps were quoted at 0900 GMT $16.90 per barrel in late afternoon trading in Singapore -- the center of Asian trading -- up from $16.35 late Wednesday and compared to falling prices in other oil products and crude. Diesel tends to be the most price sensitive oil product in Asia because of its wide uses in transportation, industry, agriculture, shipping and power generation. The news knocked fuel oil prices from the highs of the day's trading because the shutdown implied the refinery would not need to process so much fuel oil. June swaps were quoted late in the afternoon at $84.30 per ton, down 75 cents from the intraday high. Shares in SK Corp ended the day down 800 won at 24,900, a drop on the day of 3.1 percent. A spokesman for SK Corp said the fire broke out at 0510 GMT in a 30,000-bpd hydrocracker, which uses fuel oil to make middle distillates and an associated 30,000-bpd desulphuriser unit which makes low sulphur fuel oil. Both units are used to make high value oil products. The fire was brought under control within two hours. The company said two or three people were injured but had no other details immediately. Hydrocrackers can be volatile because highly flammable hydrogen is at the center of the process to break down the feedstock into premium oil products. SK Corp, which has a 34-percent market share in South Korea, said the rest of the refinery was operating normally and it did not expect any disruption to domestic supplies as a result of the fire. A company statement said it has stocks to cover any shortfall in supply that would arise from the shutdown of the unit, and the country was entering a low demand season anyhow. The unit hit by the fire was due to shut down for maintenance work on May 23 for 25 days of maintenance work. South Korea is one of Asia's biggest exporters of oil products, so loss of supply could be a blow for the market. However, gas oil prices had been falling this week owing to a general perception of ample available supplies. In February, South Korea exported 8.3 million barrels of gas oil, up 44 percent from January exports but down 29 percent from February last year. The country's export impact on Asia was greater last year because the refineries -- with combined output of some 2.5 million bpd -- diverted oil products to the export market from the domestic market owing to the economic downturn. But with the Korean economy strengthening this year, there is more domestic demand for oil. Copyright 1999 Reuters Limited