IEA sees new global crude run high in July
OREANDA-NEWS. Global crude runs will reach a new record high of over 81mn b/d in July, according to the IEA's latest monthly Oil Market Report (OMR).
The IEA estimates July global crude runs to grow by 1.2mn b/d in July from the same month last year, to 81.7mn b/d. The forecast follows strong throughput growth estimates for the first half of 2016.
Global refinery runs climbed by an estimated 1.2mn b/d on year in the first quarter of 2016, reaching 79.3mn b/d. Second quarter growth is estimated to be slightly weaker, with an increase of 800,000 b/d bringing global throughput to 79.7mn b/d. Both estimates have been revised higher from the IEA's previous OMR.
First quarter growth was largely driven by non-OECD refineries, which accounted for 1mn b/d of the global 1.2mn b/d increase. Growth was strongest in the East of Suez market, led by Middle Eastern and Chinese refineries, although new projects in Brazil and Colombia are adding a further 100,000 b/d.
New Saudi Arabian capacity will push Middle East runs to an estimated 7mn b/d by the second quarter of 2016, equivalent to around 30pc of the region's crude output. Chinese throughputs were up by 4pc from a year earlier in January and February, while March is estimated to remain flat due to refinery turnarounds. Independent refiners are thought to be driving Chinese growth, taking advantage of the more liberal crude import regime introduced last year. Non-OECD crude runs are expected to increase by almost 1mn b/d in the second quarter of 2016.
OECD throughputs rose by a comparatively small 200,000 b/d on the year in the first quarter, and are estimated to fall by the same amount in the second quarter as US throughput growth easesand European and Asia-Pacific regional runs fall. European runs are expected to fall by 400,000 b/d in July.
Refining margins suffered in March as crude prices moved higher. In Europe, average Brent cracking margins dropped to half of January levels. The US Gulf coast registered year-to-date margin lows in early March, but recovered to register gains when compared with February. In Singapore, hydrocracking margins posted small losses in March.