South Korea’s top oil refiner SK Corp will reduce its daily crude operating rates in March to 700,000 barrels, down two per cent from February runs, and may make more cuts due to weak refining margins, a source said.

Poor margins had already forced SK Corp to slash its February crude runs to 715,000 barrels per day (bpd), down 55,000 bpd from the 770,000-bpd rate in January.
The refiner, which operates an 840,000-bpd plant in Ulsan, could suffer even worse margins as Middle Eastern producers have raised their official selling prices (OSPs), and this could compel it to consider further cuts next month, the source said.
Saudi Arabia, the world's biggest oil exporter, has raised all of its OSPs for March-loading crude from February levels.
"Crude prices are going up sharply when oil product prices is not likely to rise by a large margin,” the source said, and this have already hampered Asian refining margins.
Gas oil’s premium to Dubai crude has declined to around $8 a barrel, compared with more than $10 last month, while fuel oil's discount to the benchmark Middle East crude remains weak at about $10 a barrel.
Naphtha cracking spread has flipped into discount since end-January and it has widened to more than $2 a barrel.
But shares in SK Corp, an export-oriented refiner, jumped after Japan's top refiner Nippon Oil said it had slowed operations and shut most secondary units at its plant in Hokkaido after a fire.
Traders said the threat of stretched fuel supplies towards the end of winter could help shore up profit margins in other Asian refineries, which have slumped to their lowest in more than three years.