Fuel manufacturers are forced to cut back operations as summer heat is extreme, whilst diminishing supplies are driving up petrol prices globally. According to a global oil and gas strategist for Macquarie Group, the warmest June and July on record forced refiners to reduce oil processing by at least 2% globally as long stretches of …
Fuel manufacturers are forced to cut back operations as summer heat is extreme, whilst diminishing supplies are driving up petrol prices globally. According to a global oil and gas strategist for Macquarie Group, the warmest June and July on record forced refiners to reduce oil processing by at least 2% globally as long stretches of triple-digit heat posed threatens operations.
With the excessive heat and previously associated postponed maintenance, this has resulted in an extraordinary number of refinery breakdowns this year, especially at a time when gasoline inventories are already depleting. This has contributed to petrol prices in the U.S. to reach its highest level since November last year. High-temperature forecasts for August may prevent US petrol manufacturers from going all out for the final stretch of the summer driving season, lowering hopes for price relief.
Refineries in the U.S. are facing difficulties trying to return to the peak utilization rate of 95.8% achieved in early June. According to Bloomberg statistics, at least four sites have reported fires since May, while the remaining seven have had to shut down units due to power shortages and unforeseen repairs. Strategist from Macquarie Group also mentioned that at high ambient temperatures, the ability to cool the tower overhead can become a constraint.
Cooling capacity concerns have also plagued European refineries struggling to process lighter crudes in the aftermath of Saudi and Russian supply restrictions. TotalEnergies SE of France and Saras SPA of Italy have decried the dampening effect of baking heat. Manufacturing sector recession has also caused European refiners to hold back.
According to statistics from Macquarie, global fuel makers processed an average of 82.5 million barrels of oil per day in previous month , a decline from an earlier estimate of 84 million barrels. According to the Macquarie strategist, refineries may still meet the objective in August or early September as new operations in Asia and the Middle East start up. However, the oncoming autumn turnaround season may cut short this final attempt to raise fuel production in the final weeks of the summer.
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