An interesting article published by Reuters recently speculated that high demand for gasoline by China and India could place Asia into a region of gasoline deficits after years of growing surpluses. One consultant believes that the deficit will average a 10,000 b/d deficit this year and the deficit will increase to 90,000 b/d by 2017. This would be quite a turnaround as at present, owing to fairly strong Chinese exports of gasoline in December (refiners rushing to fill export quotas) ,stocks are more than ample. Exports have abated in January and may continue to do so as domestic demand continues to grow. According to the IEA, Chinese demand for gasoline in 2015 was 2.45 mbd or almost 200,000 b/d higher than year ago numbers. For 2016,the IEA believes that demand will increase by yet another 200,000 bd to 2.64 mbd. While a much smaller gasoline market, India scored a big gain in demand for 2015 by increasing around 70,000 b/d in to an annual demand near 0.5 mbd. Most analysts believe that Indian demand should continue to grow by another 50 to 70,000 b/d in 2016. The booming gasoline demand in China and India compliment gains in the US gasoline market. Last year according to the EIA, US demand for gasoline increased by 236,000 b/d to 9.16 mbd. Thus far this year gasoline demand is up about 200,000 b/d from year ago levels. The EIA expects total gasoline demand in the US to increase by 70,000 this year, but it appears that owing to a strong start that number could grow by closer to 125,000 b/d. Despite gasoline’s demand surge, US stocks have grown to a significant surplus. Should Asian gasoline develop a deficit later this year and into next almost certainly US refiners should be able to supply Asia with finished gasoline or components. No doubt the new refinery capacity in the Middle East will be able to do the same, but ironically those new plants are geared for diesel production and come on line exactly at a juncture where it’s gasoline that the market needs. In any event its very clear that gasoline will have to carry the mail for the global refiner. The Reuters article can be found here:http://www.firstpost.com/fwire/asia-to-see-first-petrol-squeeze-in-more-than-15-years-reuters-2655860.html
by Andrew Lebow Leave a Comment
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