IEA points to divergent refining trends

OREANDA-NEWS. April 16, 2015. The IEA says divergent trends have emerged in the world refining industry, with runs rising sharply in OECD regions but surprisingly weak growth in non-OECD regions.

In its monthly Oil Market Report (OMR) published today, the IEA increased its estimate of total global refinery throughputs in the first quarter of 2015 by 160,000 b/d, to 78mn b/d, after it increased its runs estimate for the quarter by a sharp 300,000 b/d in the previous month's report.

The IEA estimated OECD refinery runs were up by 900,000 b/d in the first quarter from a year earlier, with runs up by 700,000 b/d in January and nearly 1.1mn b/d in February. Much of the increase was in Europe, where annual growth in throughput has continued for seven months from last summer onwards, despite capacity reductions and closures, as refiners profit from improved conditions and lower crude prices.

Non-OECD growth in contrast is notably weaker, with annual growth of only 250,000 b/d in the first quarter of 2015, the smallest annual increase since 2009. Strong rises have taken place in China and parts of the Middle East, but these have been offset by shutdowns in Iraq and Latin America, the effect of a revised tax scheme in Russia and modest growth in the rest of non-OECD Asia.

Global throughput is expected to fall to 77.3mn b/d in the second quarter, with 2.5mn b/d of distillation capacity expected to be offline in Asia for seasonal maintenance.

Refining margins continued to rise in March for most regions, with the exception of some US Gulf Coast markers, with lower crude prices and higher gasoline margins contributing.