|
MOSCOW (MRC) -- According to the US
Energy Information Administration’s Weekly Petroleum Status Report, for the week
ending November 13, 2020, US distillate inventories fell to 143 million barrels,
back within its previous five-year (2015-19) range for the first time since May
8, reported Hydrocarbonprocessing.
US distillate inventories reached 180
million barrels in late July, only 3% less than in December 1982, the largest US
inventory in EIA’s data, which go back to 1982.
Distillate inventories
started the year near the bottom of the five-year range and briefly fell lower
than the range in March and April. Distillate inventories then increased rapidly
as the US economy responded to COVID-19, and from late May through
mid-September, inventories remained higher than 174 million barrels. Since
mid-September, inventories have been declining and are once again within the
five-year range.
US demand for distillate has been generally increasing
since it reached an annual low in May (based on the rolling four-week average).
The increasing demand for distillate fuel has contributed to the recent
inventory decline. As of the week ending November 20, weekly EIA data indicate
that distillate demand reached 4.2 million barrels per day (b/d), similar to the
previous five-year average for this time of year.
In addition to rising
demand from the trucking and railroad industries, refineries have been making
less distillate fuel. Gross inputs into refineries measured 14.2 million bpd as
of November 20, or 14% lower than the previous five-year average for this time
of year. Distillate yields, or the ratio of distillate fuel production to
refinery inputs, have fallen since reaching a record high of 38% in April, and
more recently, it measured 31% in the week ending November 20, which is much
closer to the previous five-year average for this time of year.
As MRC informed before,
slumping fuel consumption during the pandemic is accelerating the long-term
shift of refining capacity from North America and Europe to Asia, and from
older, smaller refineries to modern, higher-capacity mega-refineries. The result
is a wave of closures, often centering on refineries that only narrowly survived
the previous closure wave in the years after the recession in 2008/09.
We
remind that PetroChina has nearly doubled the
amount of Russian crude being processed at its refinery in Dalian, the company's
biggest, since January 2018, as a new supply agreement had come into effect. The
Dalian Petrochemical Corp, located in the northeast port city of Dalian, was
expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude
in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has
the capacity to process about 410,000 bpd of crude. The increase follows an
agreement worked out between the Russian and Chinese governments under which
Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend
crude to PetroChina in 2018, or about 600,000 bpd. That would have represented
an increase of 50 percent over 2017 volumes.
Ethylene and propylene are
feedstocks for producing PE and polypropylene (PP).
According to MRC's ScanPlast report,
Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine
months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE)
shipments increased. At the same time, PP shipments to the Russian market
reached 880,130 tonnes in the nine months of 2020 (calculated using the formula:
production minus exports plus imports, exluding producers" inventories as of 1
January, 2020). Supply increased exclusively of PP random copolymer. |
