June Could Bring Crude Oversupply Reversal
Given the right conditions, the oil market could soon overcome last month’s exceptional imbalance, notes one of the past week’s most-viewed downstream-related articles on Rigzone. Find out more about this positive market prediction – and more – below.
Times have been tough in the oil market in recent months. This staff-written article conveys the message - from consultancy Rystad Energy – that they will get better. Given current conditions, Rystad’s head of oil market research noted the dramatic crude oversupply situation that plagued the market in April could be fully reversed in June. He was quick to add, however, that a sustainable oil price rally will demand that enough global supply is withheld from the market.
Another popular downstream-related article on Rigzone from the past week is this item highlighting a letter that a 24-member coalition of free-market, small-business and consumer advocates sent to President Trump. The organizations urged Trump to resist the temptation to impose tariffs on imported crude oil. They argue that such a move would hurt U.S. oil and gas producers as well as domestic refiners. Instead, they contend that reopening the U.S. economy would be the best alternative.
This article about McDermott International, Inc.’s receipt of a contract from a unit of Advanced Petrochemical Co. (APC) also earned numerous pageviews during the past week. Under the contract, McDermott’s Lummus Technology business will provide a propane dehydrogenation unit for APC’s new grassroots petrochemical complex in Jubail, Saudi Arabia.
Given the recent sharp decline in transport fuel consumption, how much of that demand returns as the economy recovers is up for debate. As this Bloomberg article points out, how many refineries will shutter is also the object of speculation. One IHS Markit downstream market-watcher interviewed by the news service predicted that European refiners will be hardest-hit by refinery rationalization, adding that the outlook is precarious for facilities in North America – particularly those on the East Coast.
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