Wood Mackenzie has said that the global oil product market is expected to experience a surplus of gasoline as early as 2017. In contrast to the current climate, where refiners are struggling to meet demand growth of approximately 420 000 bpd, Wood Mackenzie anticipates that 30 million tpy will flood the market by 2020.
Gasoline yields are to increase by 1% over the next 15 years, according to the latest oil product analysis from Wood Mackenzie, which would result in an oversupply of gasoline by 2020 unless new refineries are built.
Jonathan Leitch, a Research Director for oil product markets research at Wood Mackenzie explained: "Although gasoline cracks have been very strong this year, we could see a complete reversal in the market in just two years. The outlook for 2016 remains similar and in many ways stable, but in 2020 start we start to see a glut of gasoline supply developing – in excess of 30 million t – which doesn't go away for a decade."
Leitch continued: "Surplus supplies coupled with the continued growth of alternative fuel products from outside the refining system – increasing by 1.8 million bpd between 2014 and 2020 from products such as biofuels and gas and coal to liquid products by 2020 – means that there will be increasing pressure on refinery margins. We expect to see particularly strong growth in liquefied petroleum gas (LPG) supply from natural gas liquids (NGLs) in North America and the Middle East, and by 2019 margins could bottom out at minimum sustainable levels for Europe and Asia. We expect to see gasoline cracks come down and margins weakening again – taking us back to levels where we were last year and in 2013."
Edited from press release by Angharad Lock
Read the article online at: https://www.hydrocarbonengineering.com/refining/24082015/wood-mackenzie-30-millions-tpy-of-gasoline-to-flood-the-market-by-2020-1289/