Refiners: reduced runs. File Image / Pixabay.
The pandemic's impact of the market for refined oil products will keep the pressure on European refiners, price reporting agency Argus Media has said.
High stocks of road fuel (diesel and gasoline) prompted lower run rates from European refiners. But even with the onset of the northern hemisphere's winter and stronger demand for road fuels, low margins for the higher value fuels are unlikely to change.
"Many refiners are preparing to either reduce runs or maintain minimal levels for months to come," Argus said.
The idling of the 115,000 barrels a day (b/d) Antwerp and Europoort refineries since March has lent support to high sulfur fuel oil margins as did the broad switch to very low sulfur fuel oil production to meet IMO2020 rules.
"Weak refining margins for premium transport fuel and stronger margins for naphtha and fuel oil pose a headache for refiners that rely on firm diesel and gasoil margins to provide the bulk of their profits — particularly those refiners banking on an IMO 2020-fuelled expansion in middle distillate margins that installed capacity additions last year."
The changing demand slate may well benefit simpler plant over complex units. Gunvor intends to permanently close its 115,000 b/d Antwerp refinery, according to the report.