EMEA News
Saudi Arabia's Fuel Oil Surplus to Fall 30% This Year
Saudi Arabia's fuel oil surplus is expected drop by 30 percent this year following predictions that the Kingdom's domestic oil product demand will increase 20 percent this summer, Reuters reports.
The surplus is expected to fall to 100,000 barrels per day (bpd) on average this year as summer demand for fuel oil for power generation is expected to reach between 420,000 and 430,000 bpd from 300,000 to 410,000 bpd last year, according to analysts from Boston-based ESAI Energy and Vienna-based Energy Aspects.
Most of the country's fuel oil surplus is exported.
Although the country has added 800,000 bpd of new refining capacity in Yanbu and Jubail over the past two years, fuel oil output has not increased because refineries have been converting fuel oil to more valuable products, said ESAI Energy's Megan Wu.
"This is significant because fuel oil demand in the region is rising," she said.
Imports of fuel oil are also expected to hit record lows this year as new refineries increasingly meet demand.
Last year, the country's announcement that it would maintain crude oil outputs caused the price of oil to plunge drastically over the following weeks.
