BAKU, Azerbaijan, Sept.15
By Leman Zeynalova – Trend:
For the first time since 2009, global refining throughput failed to ramp up in July, which typically marks the start of strong activity in the third quarter, Trend reports with reference to the International Energy Agency (IEA).
“The surprisingly large month-on-month (m-o-m) fall in China in July more than offset an otherwise solid increase in run rates for the rest of the world. In August, hurricane outages in the US reduced refinery activity m-o-m. A partial recovery in China and a seasonal increase in Europe are nevertheless estimated to have pushed global refining throughput 1 mb/d higher, to 79.1 mb/d. Planned maintenance and the hurricane impact in the US, however, are likely to see September runs falling again. As a result, the 3Q21 ramp-up was revised down to just 1.5 mb/d, compared to the 1.8 mb/d quarter-on-quarter (q-o-q) increase in 2Q21,” reads the IEA report.
Lower crude oil prices in August helped refinery margins surge to multi-month highs.
“However, this is unlikely to trigger opportunistic increases in crude processing. Like US independent shale producers, refiners globally seem more financially disciplined this year and less eager to ramp up runs when demand growth is periodically set back by pandemic control measures. And the demand recovery itself is uneven across both regions and products (see Breaking down gasoline cracks). In China (excluded from the chart below), demand did not only post a rare increase in 2020, but its 2021 growth rate is expected to average 1.1 mb/d, the highest ever, helping sustain 810 kb/d growth in domestic refining activity this year. Indian demand growth in 2021 is forecast to be limited to just two-thirds of the volume lost in 2020. Stricter lockdowns in the rest of Asia this year compared to 2020 will result in demand regaining just 43 percent of last year’s loss, with full recovery not expected in 2022. In Europe, a mere 40 percent recovery will be achieved next year. In the FSU and India, demand is forecast to reach or surpass pre-Covid levels in 2022.”
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