By JENNY GROSS
LONDON -- Even accounting for faltering oil demand from China, global refinery runs in the period from July to September will be even greater this year than last, the International Energy Agency said in its monthly oil market report Friday.
Despite the weak runs in China over the last few months and our lower outlook, we're still touching year ago levels if not higher, said Toril Bosoni, a senior oil market analyst at the International Energy Agency.
Runs are relatively healthy in several other parts of the world and we expect year-on-year growth to come back in the third quarter with healthier runs.
The IEA forecast shows that despite concerns about growth in emerging economies, such as China, demand from there is still growing and refining margins still have room to improve.
Chinas crude intake is likely to increase in the coming months, just at a slower pace than previously expected because of high inventories there and faltering domestic demand, Ms. Bosoni said.
Refinery runs overall have been relatively robust so far this year, expected at 75.5 million bpd in the third quarter and are likely to continue to rise in August, according to the report.
The annual growth in global refinery runs continues to stem from developing countries, with two-thirds of growth in the second quarter from non-Organization for Economic Co-operation and Development countries. Russia and India, in particular, reported high crude intake, the IEA said.
In the US, refinery runs have been particularly strong in the run-up to the driving season this year, Ms. Bosoni said.
Product exports have been key to supporting runs. In January to May his year, US exports have surged almost 400,000 bpd year-on-year, mostly targeting Latin America and Europe.
West Coast crude runs, however, are expected to decline from current levels in August after a fire at Chevrons 245,000 bpd refinery, which could force the plant to shut for several months.
In Europe, regional runs should rise seasonally in August, though in the UK, they will drop.
The shutdown of the Petroplus Coryton refinery, which had a capacity of 220,000 bpd, will lower available capacity in the coming months, the IEA said.
Dow Jones Newswires