Lockdowns and stringent travel restrictions have caused fuel demand destruction and refiners around the world have been hit hard by this. Data and analytics company GlobalData said the travel restrictions have wiped out the market for fuel transportation.
Long storage durations for products such as gasoline and jet fuel have led to deterioration. In addition, inventory costs for refiners also rose. Refiners across the world, as a result, have been forced to cut production rates even though crude prices seen falling and attractive.
Global refinery operators had no option other than to delay maintenance activities, slash capital expenditure, under-utilize their refinery capacities, and stall avoidable projects to conserve cash and tide over the current depressed market scenario.
For road fuels, Rystad Energy’s latest demand forecast expects 2020 global demand to drop by 9.9 percent to 42.7MMbpd. Jet fuel demand is expected to drop to 4.3MMbpd this year, plunged by almost 40.8 percent.
