IEA predicts sharp rise in global refining production
By KONSTANTIN ROZHNOV
LONDON -- Global refinery output is set to rise sharply from May as refineries ramp up production after seasonal spring maintenance and amid expected stronger demand for oil products through the summer, the International Energy Agency (IEA) said Friday in its monthly oil market report.
The IEA expects global runs - or the amount of crude processed by refiners into oil products - to average 74.2 million bpd in May, up from 73.4 million bpd in April.
Throughputs are forecast to grow to 75.3 million bpd in June and 76.2 million bpd in July.
Fuel demand traditionally picks up in the northern hemisphere summer but especially in the US, the world’s largest oil consumer, when the milder weather and the holiday season encourage more driving.
The IEA expects healthy demand for fuel - such as gasoline and diesel - during this year's driving season in the US, said Toril Bosoni, a senior IEA oil market analyst.
US drivers seem to be more used to relatively high gasoline prices now and are unlikely to sharply cut road trips this summer, she said.
The Paris-based energy watchdog estimates global refinery runs in the first quarter at 74.8 million bpd, up 150,000 bpd compared with the same period a year ago.
Global throughputs in the second quarter are expected at 74.3 million bpd, less than previously forecast but up 440,000 bpd on year.
"The adjustments follow from significantly weaker US runs in April, and continued delays to the restart of Libya's Ras Lanuf refinery and outages in India," the IEA said.
"The quarterly decline in runs from 1Q12 to 2Q12 is now assessed at 500,000 barrels a day, less than last year's dip, but steeper than historical trends," the watchdog said.
The IEA also noted that efforts to reduce refining over-capacity in the Atlantic Basin were partly reversed in April, with the potential sale of four refineries previously idled due to poor profit margins.
When at least some of the facilities - the Trainer refinery in Pennsylvania, the Cressier plant in Switzerland, the Antwerp refinery in Belgium and Sunoco's Philadelphia refinery - restart under new owners, it will likely squeeze refiner's profit margins and may lead to output cuts, Bosoni said.
But it could benefit consumers as fuel prices tend to head down amid oversupply.
The IEA left unchanged its global oil demand growth forecast for 2012. Demand is expected to rise 0.9% from 2011, to 90 million bpd.
Dow Jones Newswires
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