Global fuel demand is expected to reach pre-pandemic levels by early next year as the economy recovers from the ravages of the pandemic, but excess refining capacity is likely to weigh on the outlook , oil producers and traders said.
Industry leaders said while demand for some refined products such as jet fuel has improved due to steady rise in COVID-19 infections in many markets, the consumption trends of petrol and diesel indicate higher growth.
He was speaking at the Platts APPEC 2021 conference which is being organized this year in a hybrid format, with both individual and virtual participants.
Eugene Leong, President of BP Singapore and CEO of BP Trading, said, “We saw refining margins rebound as demand rebounded… but there is still a lot of untapped potential for the world and a lot of capacity to be shut down. has given.” and shipping branch of Asia Pacific and Middle East.
“The additional (refining) capacity is probably going to act as a small cap on the margins,” he said in a pre-recorded speech for the conference.
“This year alone we have started some mega refining (and) petrochemical complexes, so I think it will be challenging for refining.”
In China, new mega-refiner Shenghong Petrochemical is set to begin trial operations soon, while Zhejiang Petrochemical completed two new crude units earlier this year.
Petronas executive vice president and Downstream CEO Arif Mahmood said that Malaysia’s Petronas also expects to resume operations at its 300,000 barrel-per-day refinery-petrochemical complex with Saudi Aramco by the end of the year.
However, an improvement in demand is expected to boost refiners’ profits and create more room for return or new production.
