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European recession restricts regional refinery throughput

Hydrocarbon Engineering,

A recent report conducted by consulting firm, GlobalData, has found that European refineries are running well below capacity. This is due to a number of factors, but in particular the economic recession in the region which keeps petroleum product demand down.

Jeffrey Kerr, GlobalData’s Managing Analyst for Downsteam Oil & Gas, has commented on the findings, predicting that Europe’s refinery throughput levels will continue to drop, remaining below their five year average for most of 2013.

Kerr has highlighted that low throughputs are a sure sign of the recession’s grip on the continent. Throughputs for the second quarter of 2013 (Q2 2013) are forecast to be 365 000 bpd lower than Q2 2012 figures of 11.5 million bdp. A decline of 533 000 bpd to 12 million bpd has been forecast for the third quarter of this year. Decline is expected to total 222 000 bdp in Quarter 4.

Kerr has additionally emphasised that lower throughputs at European refineries presents an opportunity for regions that are producing refined products at higher rates such as the Middle East, India and the US Gulf Coast; low crude prices in these regions, and higher refined product prices in Europe, gives refiners able to arbitrage products into Europe the competitive edge.

The report also demonstrates falling gasoline demand across the region; GlobalData forecasts that global gasoline demand for Organisation for Economic Cooperation and Development (OECD) European countries will shrink by 120 000 bpd from 2012 levels by the end of Q2 2013.

Global gasoline demand, on the other hand, is expected to increase over the first half of 2013. The report anticipates that worldwide demand in Q2 2013 will reach 22.266 million bpd, climbing by 553 000 bpd compared to Q1 2013.

Adapted from press release by Emma McAleavey.

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