| Code: 155730 |

How will peak oil demand affect refining

TINNews |

Wood Mackenzie in a report tries to determine how peak oil demand will affect the refining sector and discusses both long- and short-term threats to refining activity by region.

Alan Gelder, Vice President ­Research – EMEARC Refining and Chemicals said that the gasoline demand in the US is expected to decline from 2017, which was its peak, with a return to distillate-led being anticipated, although the future of the market is still unclear.

Furthermore, in addition to the change in bunker fuel regulation which is uncertain, the requirement for cleaner distillate fuels has the ability to benefit refining earnings and distillate crack spreads for 2020.

Additionally, declining OECD gasoline demand offers the global refining sector many opportunities and challenges, which are different depending on the refiner’s location.

For example, coastal sites will have to determine how to export gasoline competitively to more distant markets, while, on the other hand, inland markets will need to protect themselves from increased competition from coastal imports.

However, these opportunities are not suitable for everyone, Mr. Gelder notes and can pose serious risks.

Namely, refiners will have to expand significantly and operate in a larger scale in order to be competitive.

Furthermore, a faster pace will be required as well in order to meet the demands, a fact that can weaken a refiner who won’t keep up with the changes that are about to occur, Alan Gelder concludes.

 

Send Comment

Multimedia