More refineries in Europe are at risk of permanent shutdowns, with fuel demand on the continent declining again as major economies reimposed lockdowns to tackle the surge in coronavirus cases.
Gasoline demand in Europe is expected to be 15-20% lower in November and December compared to the same months of 2019, Argus reported, citing market players.
New lockdowns, partial lockdowns and curfews in Europe’s largest economies, including UK, Germany, France, Italy and Spain, are reducing demand for oil again while a double dip recession in the euro zone and across Europe now seems almost inevitable.
Since the spring, refiners have been grappling with collapsing demand for fuel, and many are restructuring their operations, including shutting down crude oil processing capacity for good.
Petroineos, a joint venture between Ineos and PetroChina, announced earlier this month its intention to permanently shut down certain units at the 210,000 b / d Grangemouth refinery, Scotland’s only refinery, which will reduce the plant’s refining capacity to 150,000 b / d.
Neste from Finland said in September it was explore the closure of its refining operations at Naantali and transform Porvoo’s refinery operations by co-processing renewable and circular raw materials.
“The upcoming operation and maintenance investments in the Naantali refinery are neither viable nor sustainable in a situation where there is a significant overcapacity of oil refining on a global scale,” the president and CEO said in September. General de Neste, Peter Vanacker.
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Refiners in the United States are also slowing refining capacity and cutting jobs for face the losses of the demand crash.
Refiners around the world have announced permanent shutdowns of refining capacity this year, but significant overcapacity remainsthe International Energy Agency (IEA) said in its monthly oil market report last week. Final shutdowns of refining capacity reached 1.7 million bpd. But a crude oil distillation capacity of more than 20 million bpd is now inactive, the Paris agency said, noting that “there remains significant structural overcapacity”.
By Tsvetana Paraskova for OilUSD
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