This year, Europe’s crude import requirement will shrink by roughly 80,000 b/d to 9.9 million b/d as throughput falls and regional production remains steady. However, even as total imports, particularly from Latin America, the FSU and Africa, fall, inflows of U.S. crude will continue to rise significantly.
As Indian refiners prepare to upgrade facilities in 2019 to meet the nationwide Bharat Stage VI (BS-VI) fuel spec change in April 2020, we expect throughout to stay below 5.2 million b/d. Our forecast for the capacity net of outages suggests throughput will decline in the second and third quarter to 5 million b/d.
The end-winter transition from draws to builds in US propane stocks is arriving early, according to ESAI Energy’s newly published Global NGL One Year Outlook. As it describes, the global LPG market will remain in surplus in 2019, resulting in stock builds and wide propane and butane discounts to naphtha. The implications range from the negative impact on petchem demand for naphtha in Asia and Europe to the likelihood of propane and butane stranded in the Gulf Coast pricing into the US petchem feed slate.
ESAI Energy expects most of the active waivers on Iranian sanctions will be renewed, but at a reduced level. This means OPEC+ will need to avoid significant increases for the rest of the year in order to lift and sustain crude prices. Seasonal demand will help as will falling Venezuelan exports.