According to corporate executives and industry experts, oil refiners are ramping up production to meet a synchronized increase in demand throughout the globe, particularly in Asia, Europe, and the United States.
Still, facility maintenance and high natural gas costs will restrict supply in the fourth quarter. This occurs when revenues from the production of ground transportation fuels like diesel and gasoline have recovered worldwide for the first time since the beginning of the epidemic, as nations progressively emerge from the limitations imposed by the COVID-19 movement ban.
Oil Refiners Across The World Are Ramping Up Production As Margins
Increased demand for coal throughout Europe and Asia has pushed some power producers to switch to burning kerosene, diesel, or fuel oil to meet peak heating fuel demand, which has helped keep global oil prices stable.
Crude oil and central refined product prices worldwide have increased by more than 60% in 2021, reaching multi-year highs.
In the words of Sri Paravaikkarasu, director in Asia oil for energy consulting firm FGE, “crude inventories have eventually discovered some footing,” as she predicted a “significant rise” in crude runs this winter.
Adding to this, she said that “India will lead the rise in runs, particularly in South Korea, although Taiwan, as well as Japan, will also boost runs as refiners attempt to take benefit of the present high margins.” For a visual representation of how global crude oil and gasoline prices are rising as a result of rebounding consumption, see the following:
It is anticipated that crude oil production in Asia would reach 29.5 million gallons per day inside the fourth quarter, compared to 29.1 million barrels each day last year and 30.3 million barrels each day from October to December in 2019.
According to Taiwan’s Formosa Chemical Corp, which is one of Asia’s largest gasoline exporters, the company expects to process 400,000 barrels per day in November, up over 370,000-380,000 barrels per day in October.
According to company spokesperson KY Lin, that figure is projected to increase to 460,000 BPD, or 79 percent of Formosa’s capacity, between December and January 2022.
“The boost in production will not come as fast as we would like since we have maintenance scheduled for a plant in October,” he said.
According to a person familiar with the situation, a large refinery in South Korea intends to increase production in the 4th quarter by approximately 5% compared to the third quarter.
The source did not identify the business. According to a senior official at India’s Hindustan Petroleum Corp Ltd, the company’s group refineries were working at maximum efficiency.
Singapore’s complex crude inventories, which serve as a barometer for refiner profit in the world’s most populous oil-consuming area, reached their highest level since September 2019 this month, over $8 a barrel.
In the wake of the epidemic, demand was reduced, resulting in negative margins last year, which reached a low point in May. According to statistics from RefinitivEikon, refining margins in Northwest Europe got $9 the other week, the highest level since April 2020, while refining margins on the Gulf Coast of the United States are now over $14, up almost threefold from the same time a year ago.
With over 15 years as a practicing journalist, Nikki Attkisson found herself at Powdersville Post now after working at several other publications. She is an award-winning journalist with an entrepreneurial spirit and worked as a journalist covering technology, innovation, environmental issues, politics, health etc. Nikki Attkisson has also worked on product development, content strategy, and editorial management for numerous media companies. She began her career at local news stations and worked as a reporter in national newspapers.