IEA flags larger seasonal refinery run rise this year

Seasonal refining activity will raise global throughput by 4.2mn b/d by August from May levels, according to the IEA, with the ramp-up concentrated in the western hemisphere.

The increase represents a firm rise from 2018, when throughput climbed by 3.3mn b/d between May and August. Refinery runs in the Atlantic basin, led by the US and Europe, will increase by 0.9mn b/d on a monthly basis, the IEA said in its latest Oil Market Report (OMR).

The IEA forecasts throughput growth to climb by 1.1mn b/d year on year to 83.7mn b/d in 2020 — more than double the rise it foresees for this year. The IEA forecasts refined product demand to grow by 0.9mn b/d.

The IEA forecasts 2020 throughput in non-OECD Asia-Pacific, which does not include China, will rise by 0.5mn b/d. OECD Americas throughput will rise by 0.3 mn b/d, as will Mideast Gulf throughput. Overall OECD throughput will be 38.8mn b/d, and non-OECD throughput will be 44.9mn b/d.

The IEA said 3.5mn b/d of new capacity will come online in 2019 and 2020 combined. It revised down its forecast for capacity additions in 2019 from the Oil 2019 report it released in March, to 2.4mn b/d, a consequence of several Chinese additions being pushed into 2020. It's projection for capacity additions in 2020 were revised upwards by 0.6mn b/d, to 1.1 mn b/d.

Global refining throughput in May declined by 0.9mn b/d from April to 80.4mn b/d. This was 0.8mn b/d lower than May last year and the lowest since March 2017, the IEA said. Unplanned outages in Europe and the US compounded a high global maintenance programme.

US refining activity in the year to date has seen the worst seasonal performance since 2005. Runs increased by 370,000 b/d from April but were down by 280,000 b/d on the year. Throughput in May was 700,000 b/d below December, with unplanned outages and weather disruption reducing runs in the US midcontinent by 600,000 b/d year on year in May, or around 16pc of capacity. Higher throughput in the US Gulf was unable to offset the decline.