Mexico’s throughput fell suddenly this month, suggesting there are even more structural problems with refineries than originally thought. Lower throughput will boost the country’s exportable surplus in the fourth quarter, before falling in 2019 as AMLO has Pemex raise runs.
In 2020, changing contributions from gasoil, gasoline, and fuel oil to refining margins will effect refineries based on geography and profile. Cracking refiners that can upgrade heavier high sulfur material will benefit, while less sophisticated refiners that produce heavier sour grades of crude oil and rely on HSFO bunker demand, will struggle.
Due to U.S. sanctions, Iran will reduce fuel oil exports next year with flows to Asia falling most. Iran’s power sector will consume the excess fuel oil, reversing a multi-year trend in which power plants have replaced fuel oil feedstocks with natural gas. This will contribute to a larger regional deficit of fuel oil, supporting spreads to crude before IMO hits
Oil and Gas Investor:
A high-stakes competition is emerging among energy exporters proposing multi-million-dollar crude terminals along the U.S. Gulf Coast to handle a gusher of shale oil coming from West Texas oilfields.