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Refiners may get some hope on recovery of jet fuel demand

April 08/2021

MOSCOW (MRC) -- Jet fuel demand is picking up, which could give refiners some hope after the global pandemic boosted distillate inventories and sank margins, reported Reuters with reference to a senior refining executive.

Refiners have been mixing jet fuel into diesel inventories for the last several months, since they have been unable to sell the product due to the sharp decline in air travel.

Jet fuel demand numbers are starting to improve and show signs of life, allowing refiners to drop less jet into diesel which will eventually provide well-needed relief on distillate stock, said Joe Israel, chief executive officer of Par Pacific, a West Coast refiner.

Distillate margins are averaging USD5.17 a barrel in the first quarter of 2021, approximately half the levels of the prior-year quarter, according to energy consultancy Tudor, Pickering and Holt.

Jet fuel recovery has lagged gasoline demand, which is already touching pre-pandemic levels, according to data from the Energy Information Administration.

In the first quarter of 2021, world refiners utilized capacity was 10% to 15% lower than pre-pandemic levels, but refiners expect it to increase in coming months. Considering the recovery assumptions, expectations are for world refineries to close that gap to approximately 5% through the summer, Israel said.

As MRC informed before, renewed lockdown restrictions in Europe and slower than expected vaccine rollouts are likely to check a global recovery in fuel demand and make OPEC+ oil producers take a cautious stance when the group reassesses output policy in early April.

Oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegazs existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.


mrcplast.com
Author:Margaret Volkova
Tags:Europe, PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, gas processing, petrochemistry, Gazprom neft, Sibur Holding, Shurtans Gas-Chemical Plant, Russia, USA, Uzbekistan.
Category:General News
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