*Fuel Demand to Remain Under Pressure*
OPEC predicts that demand for fuel will continue to struggle into the second half of the year due to the effects of the virus. The group has kept its forecast for oil consumption unchanged predicting a 9% fall in demand, however it cut its supply needs by 2.17 mbd. Current production by the cartel is 24.195 mbd, down 6.3 mil from last month.
*Second Wave Risks*
Traffic congestion in the Chinese capital was 29% at 8 a.m. yesterday morning, compared with 67% at the same time a week earlier, and 62% for average levels at that time during 2019. New infections in the city have reportedly now reached 150, but they have refrained from a city-wide lockdown as of yet. But this does highlight how the virus could spring up as a second wave could significantly harm oil and product demand suddenly.
*Higher Refinery Runs*
India’s gasoline consumption recovered in May, after falling to an 11-year low in April, surging 81.8% month on month to 1.769 million mt. Indian refinery throughput in April fell 1.4 million b/d both month on month and year on year to 3.6 million b/d, according to the International Energy Agency. But refiners reported higher operating rates in May. Pakistan’s refineries have increased rates to 60-80%, after running at lower rates as product demand declined on the back of the lockdown to combat the coronavirus pandemic. New Zealand’s Refining NZ has shifted maintenance works at Marsden Point to March 2021, deferring the turnaround at the plant’s crude distillation and gasoline producing units. The units were initially scheduled to shut some time in the second half of 2020, but restrictions on movement to contain the coronavirus pandemic have forced the company to review turnaround plans. PetroVietnam’s Binh Son Refining and Petrochemical has postponed maintenance at its refinery at Dung Quat for a second time. In Taiwan, Formosa has also been operating its two RFCCs at an average 80% of capacity since the No. 2 RFCC restarted from a turnaround on May 20, and will keep the operating rates at this level through June.
*Oman The Oil Storing Plan*
Oman’s ambitious goal of building the biggest oil-storage facility in the Middle East is finally progressing, more than seven years after the Gulf sultanate announced the plan. Eight new tanks to store crude for a new refinery near the town of Duqm on the Arabian Sea have almost been completed. This new facility could provide alternative for energy traders and exporters eager to avoid the Strait of Hormuz, which can be a choke point for oil exports. (FIS)