On Thursday, on its Oil Market Report (OMR), the International Energy Agency (IEA) predicted that by the end of 2020, global refinery intake would rise from May’s nadir but still below 2019’s average.
By December 2020, the IEA expects the intake to jump by 9.4 million bpd. However, compared to the average in 2019, the level would be down by 6.9 million bpd.
In July, runs rose by 3.7 million bpd from May’s level at 72.5 million bpd. In December, the run would increase by a further 5.6 million bpd.
For 2021, rates are seen to climb by 4.5 million bpd on a yearly basis to 79.4 million bpd. Previously, the IEA estimated the level to be at 81.7 million bpd.
In the Organisation for Economic Co-operation and Development (OECD), next year’s runs would likely be 35.1 million bpd, down from IEA’s previous estimate of 36.9 million bpd. For non-OECD countries, the IEA adjusted down the forecast to 44.2 million bpd from 44.8 million bpd.
The agency cited that the estimate was affected by the downward revision for oil demand, with its diesel, gasoil, and jet demand forecasts.
Further, the IEA saw the global throughput in the second quarter to fall to the lowest in 17 years, by 11.5 million bpd to 69.5 million bpd.
However, a strong rebound in China’s refining activity would offset the 800,000 bpd yearly fall in the first quarter and would make it the only country with growth in refining activity this year. In the second quarter, pushed by cheaper crude, the country’s refining activity climbed by 700,000 bpd year-on-year.
This year’s forecast of refinery runs was adjusted downward to 74.8 million bpd from 76.4 million bpd. For the OECD, the estimate was cut from 34.8 million bpd to 33.7 million bpd. For non-OECD, the adjustment was by 300,000 bpd to 41.2 million bpd.
For the non-OECD, the IEA attributed the change to the marginally lower forecasts for the former Soviet Union, non-Chinese Asia-Pacific, and Latin America. Other than that, the Middle East is expected to cut 500,000 bpd from the current level of 6.7 million bpd.
