REFINING margins at Singapore's oil refineries dipped in the second quarter because of weak regional demand, though the imminent closure of some smaller Australian refineries could improve their prospects in the second half of the year.

This picture of a weak Q2 for the oil industry here - which never publicly discloses margins - was gleaned from financials reported by ExxonMobil, Shell and Chevron last week.

Shell chief financial officer Simon Henry said that while refining margins were higher in Europe, "they fell in the US and in Singapore, particularly in Asia-Pacific".

"In Europe, they're [industry chemical margins] underpinned by the falling naphtha price, but in Asia-Pacific, again, they remained low due to weak demand."

A transcript of a Q&A with analysts provided by Seeking Alpha cited Mr Henry as saying that "in downstream, we do see evidence of a slowdown at the end of the second quarter, and that is as we effectively entered the third quarter with softer industry refining margins in the US and Asia-Pacific."

A Forbes report said the Singapore refining margins of Chevron - which has a half share with PetroChina in the 290,000 barrel-per-day (bpd) Singapore Refining Company facility here - slid to US$9.30 a barrel in Q2 from US$9.78 in the previous quarter.

The oil majors also warned of weaker global growth hitting the refining industry.

ExxonMobil's vice-president (investor relations), David Rosenthal, said the global economy slowed in Q2 because of the eurozone crisis. "China growth, while still robust, continues to weaken than prior-year levels."

Shell CEO Peter Voser also cautioned that with weak economies, "industry returns downstream are likely to remain under pressure for some time".

ExxonMobil with a 605,000 bpd refinery on Jurong Island and Shell with its 500,000 bpd Bukom facility have both built up their largest manufacturing sites worldwide, including integrated petrochemical complexes, in Singapore.

One bright spot for Singapore refiners will be Australia, where Chevron and Shell will be shutting uneconomic, smaller refineries, and will instead secure transportation fuels such as gasoline and diesel from the Republic.

Reports said Shell will shut its 79,000 bpd Clyde refinery near Sydney in September, while Chevron will close its 124,000 bpd Kurnell refinery in 2014, with both refineries turned into import terminals instead. Shell, Exxon and Chevron have reportedly secured their diesel and gasoline barrels from their Singapore refineries already.

This will also open up opportunities for Singapore- based trading houses to supply Down Under. Already, prices of the transportation fuels have risen, boosting refinery margins in the process. A BP refining measure is already showing a 14 per cent rise in Singapore refining margins so far this quarter compared with Q2.