Under a number of new policies, the Chinese independents will catch up on fuel specifications for gasoline and diesel, and expand their market share to 33 percent by 2017.
The Crude Oil Balance is projecting a deficit for June through September and the Global Oil Balance is projecting a deficit for May through October. Ceteris paribus, oil prices should continue strengthening from current levels of around $48 Brent.
High product stocks are weighing more heavily on refining margins in Europe and Asia and refiners are beginning to respond with lower throughput. At the same time, tight crude fundamentals will support higher feedstock costs this summer. 2016 throughput growth has been..
The NGL market is in the midst of a bearish-to-bullish reversal led by ethane and propane. In the 12-month forecast period, fundamentals for both products will essentially follow the same path. Waterborne exports and lower NGL production will chip away..
Pressure Mounts to Curtail Throughput High product stocks are weighing more heavily on refining margins in Europe and Asia and refiners are beginning to respond with lower throughput. At the same time, tight crude fundamentals will support higher feedstock costs this summer. 2016 throughput growth has been revised slightly lower accordingly resulting in a more…
Turkey Drives European Product Demand Growth With economic growth forecast to outpace the rest of Europe and a sustained influx of migrants expected due to the continuing violence in Syria and the migrant deal with the EU, Turkey is expected to account for about 65,000 b/d, or half of total European product demand growth in…
Global inventories of middle distillate and gasoline have reached critical levels where they are simultaneously preventing any recovery in diesel and jet fuel spreads to crude, and introducing more “normal” conditions to a previously tight gasoline market. The result should be a more typical
Low Venezuelan Throughput Threatens PetroCaribe In the wake of a series of severe refinery disruptions, ESAI Energy has revised down its expectations for Venezuelan throughput for the middle part of 2016. Those revisions, from already low utilization rates have led our expectations for balances in the country and the wider Caribbean Basin to deteriorate further…
Unofficial Commercial Crude Stocks Rising Despite moderate oil product demand growth of 310,000 b/d, China is expected to increase net crude imports by 450,000 b/d to 7.1 million b/d in 2016. ESAI Energy believes in addition to over 70 million barrels of SPR fill and official commercial crude stock build, up to 90 million barrels…
EU-16 transport fuel demand is expected to increase by an annual average of less than a 60,000 b/d in 2016 and 2017, a far cry from growth of nearly 130,000 b/d in 2015. Diminishing demand growth will limit the recovery of a weak global distillate market and keep regional diesel refining margins low.
An OPEC-non-OPEC production freeze will be too little too late to impact the crude oil surplus in a manner that liquidates inventories. The upside for crude prices is limited, but even so, crude prices will rise seasonally along with still healthy gasoline markets.
ESAI Energy estimates that the amount of refining capacity at risk of closure will rise back to more than 800,000 b/d in 2017 after falling to almost zero in 2015. OECD refiners will cut runs by 100,000 b/d in 2016 after a nearly 1.1 million b/d year-on-year rise in 2015.
NYH gasoline spreads will rise above $20 per barrel this summer. Demand growth, which will be smaller this year compared to 2015, is only part of the reason behind anticipated gasoline strength in 2016. More notably, weak demand and oversupply for other refined products, especially diesel, will limit throughput and constrain gasoline supply.
The EU-16’s crude import requirement will remain unchanged at about 8 million b/d from 2015 to 2016 as a forecast drop in refinery throughput is mostly offset by a decline in North Sea production. Meanwhile, a resurgent Iran, intent on restoring European market share, will push barrels into Europe, and thus place downward pressure on European crude prices. As a result, Russia and other suppliers will have a portion of their exports crowded out of the European market.
After falling in 2016, crude oil output growth should return to Latin America and reach 100,000 b/d by 2020. Growth will come as a liberalization trend sweeps the region’s oil industries in the short term due to low oil prices and a political shift to the right. As a result, foreign investment and participation in Latin America’s upstream will be a key component of production increases in the second half of the decade.