According to EIA’s ‘Oil Market Report’ report, global oil refining capacity is expected to increase rapidly, resulting to a product boost from diesel, to gasoline, to marine fuel. The capacity will grow by 2.6 million barrels per day and the demand for the refined products will be approximately on 1.1 million barrels per day.
Mainly, the rise does not clear the situation for margins, which decreased as the price of crude oil increased in 2018, as stated by the Parisian EIA that is responsible for coordinating the energy policies for industrialised countries.
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The developing demand uses only the half of the capacity coming on stream. If refining margins are being supported by accommodating crude prices, the utilisation rates will not experience a decrease. As a result, the product stocks will rise.
IEA supported that an increase in product stock will be useful, prior to the IMO’s 2020 sulphur cap.
Margins are experiencing challenges from the developing oil throughput, which hit a record on December 2018, by 84.2 million barrels per day.
Also, refineries will process 83.4 million bpd in 2019, in comparison to 82.2 million bpd last year.
Concluding, EIA highlighted that the refining industry is to face challenges in 2019 in the possibility that crude prices keep on increasing for a third year in a row, which will result to a forceful slowdown in some refining regions.
