Diesel fuel demand to drive global refined product demand, margins

In the aftermath of the global recession, diesel fuel demand will rebound and again drive global refined product demand and margins, according to a new global report released by Hart Energy Consulting. Low-sulfur diesel markets will strengthen and remain strong for the foreseeable future.

Gasoline demand will experience significant reductions in the Atlantic markets, as vehicle economy standards are implemented and biofuels continue to penetrate the market. Excluding the ethanol contribution, gasoline demand for Europe plus North America will decline 20% from peak 2007 levels by 2020. By 2030, gasoline demand (less ethanol) will be more than 37% below 2007.

Refineries in Europe and North America will face tough challenges in reducing gasoline yield and meeting diesel needs, dictating refinery reconfiguration and rationalization.

Speaking about changes in regional trends, Terrence Higgins, executive director, Refining & Special Projects, Hart Energy Consulting, said, “Gasoline growth will shift from the Atlantic markets to Asian and Middle East regions. However, even these markets are less promising as natural gas substitution and prospects for reductions in fuel subsidies will constrain growth in some developing markets.”

Expanding economies in China, India, and the Middle East will make up a large portion of the gasoline demand reduction in the Atlantic market. But the report reveals that longer-term these high-growth areas will see demand growth falling from 7+% annual rates to less than half this growth.

The full report covers:

•Country-specific, regional and global production data for crude and NGL, refined product quality and supply to 2030 •Key focus on the growth of China, and increasing demand in Asia Pacific and the Middle East •Supply and demand, by sulfur limit, for gasoline, naphtha, jet fuel, kerosene, diesel, distillate, marine, and residual fuel •Impact analysis of production, environmental and CO2-related policy requirements on transportation fuel quality •Analysis of Europe’s need for high cetane diesel and its suppliers •Key focus on Brazil’s ability to increase crude supply, and output of refined products and advanced biofuels

•Short- and long-term crude and refined products pricing and margin analysis For more information, Terrence Higgins is available for comment at +1.703.891.4815 or [email protected].

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