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IEA says refining throughput set for quarterly rise

October 19/2020

MOSCOW (MRC) -- Global refining throughput will increase in the last quarter of the year by more than 2 MM barrels per day (bpd), the International Energy Agency (IEA) said, though the rise will not be sufficient to balance oil products markets, reported Reuters.

The sharp fall in demand for transport fuels owing to coronavirus lockdowns has placed significant pressure on refiners worldwide, weighing on margins and dragging down utilization rates to their lowest in 35 years.

The IEAs monthly report said that global refinery crude throughput was at 73.7 MM bpd in the third quarter, almost 9 MM bpd down from the same period last year.

It predicted the crude intake would rise by 2.1 MM bpd to 75.8 MM bpd in the final quarter of the year.

Nevertheless, runs will be almost 3 MM bpd below the levels required to balance the product markets, leading to stock draws, the agency said.

Average global throughput in 2021 will rebound by 4.9 MM bpd to 79.4 MM bpd, the agency forecasts.

Refineries have also faced the challenge of a structural shift in oil use, moving away from transport fuels such as gasoline, diesel and jet fuel towards petrochemicals feedstock.

The petrochemicals sector remained strong during lockdowns, buoyed by the need for single-use plastics and packaging materials as a result of a boom in online shopping.

However, the IEA said the fall in crude prices in September, the first since April, offered some short-lived support to product margins.

European gasoline barge profit margins hit a seven-month high last week, boosted by firm export demand from West Africa and the United States and regional refinery shutdowns.

European diesel markets also recovered this month from historic lows as regional refineries shut for maintenance and Russian exports dropped, helping to offset persistently weak demand.

As MRC wrote previously, Croatia's Rijeka refinery will be optimizing its operations from November "for a few months" and during that period will "perform regular technological activities at process units such as catalyst regeneration and preparation of these plants for the new processing cycle in 2021 through regular maintenance work."

We also remind that Croatias oil and gas firm INA said in July 2020 it aims to invest 250 million euros (USD282.4 million) to build a biorefinery in the central town of Sisak to help reduce its carbon footprint. The company, whose biggest shareholders are Hungarys energy group MOL and the Croatian government, has applied for strategic project approval at Croatias ministry of economy and entrepreneurship. It is also seeking European Union funding, as the bloc of which Croatia and Hungary are members, aspires to cut emissions to zero by 2050.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
Author:Margaret Volkova
Tags:Asia, Europe, PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, ethylene, petrochemistry, MOL Group, TVK, Russia, USA, Croatia.
Category:General News
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