Oil Refining Industry Can't Keep Up With Demand
02.21.2022 By Ricardo Perez - NEWS

February 21, 2022 [OilPrice.com] – The price of global refined products are soaring—even more so than crude oil itself, as demand for those refined products is proving too much for refiners to keep up with, according to a new analysis by Vortexa.

 

Inventories of refined products are now near historic lows—and given the refining maintenance season that will soon be upon Asia and Europe, it doesn’t look that those historical lows are going to ease substantially.

Most refiners in Asia and Europe enter their refining maintenance season in Q2. But so far, Vortexa says, there is no indication that those refineries have plans to ramp up production ahead of maintenance season to provide a cushion to survive turnaround.

What this means is that today’s tightening may soon grow even tighter.

One might find it surprising that today’s high global refined products prices aren’t enticing refiners to up their runs. But higher costs for refiners as a result of higher natural gas prices, higher crude oil prices, and higher carbon tax costs in Europe are sucking up the extra cracks.

In the United States, gasoline supplies are also low—and falling–in part due to refinery and FCC maintenance in Q1.

Around the world, spare refining capacity is not widely available. According to Vortexa, Japan is one of the few countries with refining capacity to spare, but even Japan has, over the last two months, increased run rates by 40% compared to June 2021. Mexico has some spare capacity as well, but it hasn’t tapped that capacity in years, and China has spare capacity, but China’s spare capacity is tightly controlled by the Chinese government.

It’s likely that only a greater increase in refined products prices could entice China and Mexico to bring some of that capacity back online.

Click Here to Access a 10,390 Tank Terminal Database With a Pro Trial

10,390 terminals as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

India's First Methanol Plant to be Set up in Telangana
11.21.2024 - NEWS
November 21, 2024 [Chem Analyst]- In a groundbreaking initiative, India is set to get its first m... Read More
Egypt in Talks with Foreign Companies Over Long-Term LNG Purchases, Sources Say
11.21.2024 - NEWS
November 21, 2024 [Reuters]- Egypt is in talks with U.S. and other foreign companies to purchase ... Read More
INEOS and GNFC Sign a Memorandum of Understanding to Build a New World Scale Acetic Acid Unit in India
11.21.2024 - NEWS
November 21, 2024 [INEOS]- INEOS Acetyls and Gujarat Narmada Valley Fertilizers & Chemicals L... Read More
Peru's State Oil Firm Could Open to Private Investors in 2025, Chairman says
11.21.2024 - NEWS
November 21, 2024 [Reuters]- Peru’s indebted state-run oil firm could consider offering a ... Read More