The global oil refining industry is facing a reckoning from falling fuel demand that is the deepest and fastest ever.
FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. . REUTERS/Angus Mordant
“This Covid isn’t going to kill the refining industry, but it might kill those with underlying conditions,” said John Auers, a refining analyst at consultancy Turner, Mason & Co. The coronavirus outbreak has cut global gasoline demand by 50% and jet fuel demand by 70%, according to consultancy Facts Global Energy.
In Northwest Europe, refiners that binged on sweet crude are paring 2 million barrels per day from run-rates, said Jan-Jaap Verschoor, an analyst at Oil Analytics in London. He estimated the drop in oil processing worldwide has already reached 5 million bpd.Financially weak refiners and those serving small markets are at most risk of consolidation. If forced to shut down, they face a loss of customers that could make it harder to reopen.
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