China to become oil refining juggernaut, raising global risks

China to become oil refining juggernaut, raising global risks

MOSCOW (MRC) -- China is both the biggest driver of future demand for crude oil, and the biggest risk to global refining as it will continue to hold much of the world's spare capacity, said Hydrocarbonprocessing.

The International Energy Agency's (IEA) medium-term oil market report, released on Wednesday, forecast that Asia, and particularly China, was the engine of crude oil and refined product demand growth up until 2028.

China is also expected to add the most amount of crude refining capacity over the period from 2022 to 2028, and hold the largest volume of spare capacity, according to the IEA, which acts as an energy adviser to developed nations. The report highlights that this presents both opportunities and risks for the global oil and product markets.

The main risk is that the world's reliance on China's exports of refined fuels increases, but China's exports aren't determined by market imperatives. Rather, China's refined product exports are subject to quotas granted by Beijing, which acts more in what it deems the interests of the domestic economy and markets, rather than what the global markets may be signaling.

The IEA said China had about 3 million barrels per day (bpd) of unused refining capacity at the beginning of 2023. It expects that China's unused capacity will rise to 3.2 million bpd by 2028 as additional refining units are added at a faster pace than throughput volumes.

Over the 2022-28 period China will add 1.5 million bpd of new refining capacity, taking nameplate capacity to 19.7 million bpd, but processing volumes are expected to rise to 16.5 million bpd over the forecast period.

We remind, U.S. crude oil stockpiles posted a surprise large build last week, while gasoline and distillate inventories gained more than expected. Crude inventories rose by 7.9 million barrels in the week to June 9, the EIA said, compared with analysts' expectations in a Reuters poll for a draw of 510,000 barrels. "U.S. crude inventories have jumped higher, hitting the brakes on today's rally, while builds to the products are somewhat inevitable given strong refinery runs," said Matt Smith.

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MEGlobal decreased July MEG ACP by USD50/tonne

MEGlobal decreased July MEG ACP by USD50/tonne

MOSCOW (MRC) -- MEGlobal has nominated its July 2023 monoethylene glycol (MEG) Asian Contract Price (ACP) at USD790/tonne, down by USD50/tonne from its June ACP, said the company.

The price is on a CFR (cost & freight) Asia basis.

We remind, MEGlobal announced that its Asian Contract Price (ACP) for monoethylene glycol (MEG) will be USD840/MT CFR Asian main ports for arrival June 2023. The June 2023 ACP reflects the short-term supply/demand situation in the Asian market.
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EQUATE announces Jun MEG India Contract Price at USD501/tonne

EQUATE announces Jun MEG India Contract Price at USD501/tonne

MOSCOW (MRC) -- Global monoethylene glycol (MEG) producer EQUATE has nominated its June 2023 MEG India Contract Price (ICP) at USD501/tonne CFR (cost & freight) India Main Ports, said the company.

The June nomination was USD7/tonne lower than the May number.

We remind, global monoethylene glycol (MEG) producer EQUATE has nominated its May 2023 MEG India Contract Price (ICP) at USD508/tonne CFR (cost & freight) India Main Ports. The May nomination was USD7/tonne lower than the April number.
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U.S. crude inventories post surprise large build, fuel stocks rise

U.S. crude inventories post surprise large build, fuel stocks rise

MOSCOW (MRC) -- U.S. crude oil stockpiles posted a surprise large build last week, while gasoline and distillate inventories gained more than expected, as per Hydrocarbonprocessing.

Crude inventories rose by 7.9 million barrels in the week to June 9, the EIA said, compared with analysts' expectations in a Reuters poll for a draw of 510,000 barrels. "U.S. crude inventories have jumped higher, hitting the brakes on today's rally, while builds to the products are somewhat inevitable given strong refinery runs," said Matt Smith, lead oil analyst for the Americas at Kpler.

While refinery utilization rates dropped by 2.1 percentage points in the week, rates are still relatively elevated compared to recent months. Meanwhile, refinery crude runs fell by 61,000 barrels per day (bpd). Oil prices pared gains following the data and turned slightly negative after rising USD1 per barrel earlier in the session. Brent crude futures traded at USD74.26 and U.S. crude was at USD69.34 at 10:55 a.m. EDT.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.6 million barrels last week, the EIA said, to the highest since June 2021. Cushing stockpiles have gained for eight weeks in a row, the data showed. Gasoline stocks rose by 2.1 million barrels in the week, the EIA said, compared with analysts' expectations for a rise of 316,000 barrels.?

Distillate stockpiles, which include diesel and heating oil, rose by 2.1 million barrels in the week versus expectations for a rise of 1.2 million barrels, the EIA said. "The across-the-board inventory increases are decidedly bearish for the oil markets," said Andrew Lipow, president of Lipow Oil Associates in Houston. "It continues the trend we've seen in the refined products over the last month." Net U.S. crude imports dropped by about 810,000 bpd, the data showed.

We remind, India will soon overtake China as the largest driver of global oil demand, International Energy Agency (IEA) chief Fatih Birol said on Wednesday.The Paris-based energy agency said in its outlook report released on Wednesday that about three quarters of the 2022-28 demand growth increase will come from Asia, with India surpassing China as the main source of growth by 2027.

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India soon to overtake China as largest oil demand driver

India soon to overtake China as largest oil demand driver

MOSCOW (MRC) -- India will soon overtake China as the largest driver of global oil demand, International Energy Agency (IEA) chief Fatih Birol said, as per Hydrocarbonprocessing.

"One of the reasons why we say this is that electrification of cars and buses in China is growing rapidly," Birol told reporters on the sidelines of a G20 event in New Delhi. "I very much hope India will move closer in terms of electrification."

The Paris-based energy agency said in its outlook report released on Wednesday that about three quarters of the 2022-28 demand growth increase will come from Asia, with India surpassing China as the main source of growth by 2027.

Birol also said that, since India has abundant renewable energy capacity, the country should not miss the opportunity to become a superpower in the green hydrogen business.

We remind, India's fuel consumption surged in May with diesel sales scaling a record high, buoyed by strong factory activity in the third-largest oil consumer in the world. India's factory output expanded at the quickest pace since October 2020 last month at a time when regional peers such as China, Japan and South Korea have seen their manufacturers struggle for prolonged periods.

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