IEA sees global crude refining volumes on rise
By CASSIE WERBER
LONDON -- The volume of crude oil passing through global refineries is forecast to rise in the fourth quarter of 2012, with China and India leading growth in the sector, according to the International Energy Agency.
But profit margins for refiners fell in every region other than the U.S. Midwest in November, the IEA said, due largely to falling prices for gasoline and fuel oil.
In its monthly report on the oil sector, released Wednesday, the IEA said that the projected daily average for refinery runs was up year-on-year by 950,000 bbl, to 75.3 million bbl. Growth is expected to continue into the first quarter of 2013, when refinery throughput is forecast to be 75.8 million bpd.
The report noted that the main driver of this growth would be Asian countries outside the Organization for Economic Co-operation and Development, a group that represents some of the world's most affluent countries.
"Growth is concentrated in non-OECD Asia, with both India and China expected to expand as new capacity is commissioned," the IEA report said.
In October, India recorded record-high refinery throughput of 4.5 million bpd, while China's refining productivity in September and October grew year-on-year by 600,000 bpd. China refined a total of 9.5 million bpd in the fourth quarter.
The IEA said that Russia "surprised" the market by refining a record 5.6 million bpd in the quarter.
In Europe's refining sector, where there was some growth in the third quarter of 2012, a return to contraction is expected in the fourth quarter. The report cited "weak underlying demand and falling margins' for the slump.
Looking forward into 2013, the report said that China's independent refining industry is "undergoing strong reforms," with some small refineries closing and others gaining permission to import increased quantities of crude.
The impact of these moves isn't yet clear, but could become significant in the coming year, the report said:
"If the license to import crude oil is extended to all independent refiners in China, fuel oil market dynamics in the region could be severely reshaped," the IEA said.
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