IEA says refining throughput set for quarterly rise

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

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 IEA’s monthly report said that global refinery crude throughput was at 73.7 MMbpd 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 MMbpd 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 MMbpd 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.

Reporting by Bozorgmehr Sharafedin; Editing by David Goodman

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