President-elect Lopez Obrador’s promise to freeze gasoline prices will support gasoline demand, which is on track to grow by 15,000 b/d this year. An increase in refinery throughput will more than offset the impact on Mexico’s imports though. We expect a modest increase in utilization rates in the second half of the year, increasing gasoline supply by 60,000 b/d compared to the first half of 2018 and reducing Mexico’s import requirement by 40,000 b/d.
China is set to add more than 1 million b/d of refining capacity in late 2018/early 2019, translating into substantially higher Chinese exports of gasoline and diesel. This is more than Asia’s main fuel importing countries, in the Southeast, can absorb. The oversupply will put pressure on regional gasoline and diesel spreads to crude next year.
Oil & Gas Journal:
Russian oil producers are ready and willing to expand output beyond the 200,000 b/d implicit in Russia’s recent agreement to relax production limits, according to ESAI Energy.
A counter-seasonal increase in U.S. LPG exports reflects the strong response of export demand to competitively priced LPG. High exports also maxed out U.S. export infrastructure, a reminder that soon a lack of LPG export infrastructure will strand propane and butane in the U.S., causing the North American and international markets to decouple – again.