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

TC Energy Completes Spinoff of Liquids Pipeline Firm South Bow
10.04.2024 - NEWS
October 04, 2024 [Rigzone]- TC Energy Corporation has completed the spinoff of its Liquids Pipeli... Read More
The Benefits of API 650 Standards in Ensuring Tank Integrity and Safety
10.04.2024 - NEWS
October 04, 2024 [Big News Network]- In industries dealing with hazardous substances, the integri... Read More
Warren Buffett is Buying This Magnificent Oil Stock
10.04.2024 - NEWS
October 04, 2024 [Nasdaq]- Warren Buffett finally did it. After making a monster investment in A... Read More
China’s Cracker Expansion to Drive LPG Storage Growth
10.04.2024 - NEWS
October 04, 2024 [Argus Media]- China’s LPG storage capacity is expected to expand again in... Read More