Released April 30, 2020 | SUGAR LAND
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PETROLEUM REFINING HIGHLIGHTS
Looking at today's IIR Global Refinery Report, Industrial Info shows certain regions with improved utilizations. The key to recovery will first come with automobile tanks being filled. Gasoline and diesel sales still languish, although lockdown measures are set to ease further in May. Industrial Info predicts a slow but steady return to normal demand. We see this pressure the refiners, of course, but as the table shows, some regions have seen signs of an uptick in road fuel demand over the last week. We still expect a slow recovery to normal consumption, even as the country lifts its coronavirus lockdown.
Last week, sales of jet fuel were down by 95% year on year, while gasoline sales were down 60% and diesel sales were reduced by30%. One European country, Austria, which started relaxing its measures to curb the spread of the coronavirus, allowing small shops, public parks, and stores and gardening centers to reopen, has seen road fuel sales recover somewhat, with gasoline currently only 35% lower and diesel down only 20% on the year.
The hope is that consumers have had enough of staying in their homes and that they are going to drive as much as possible as soon as possible.
That's the best storage the industry can get right now--millions of cars at the pumps. It's similar to when a hurricane is threating landfall--drivers fill up the tanks of hundreds of thousands of cars, and it empties storage fast.
PETROCHEMICAL HIGHLIGHTS
Industrial Info is seeing that a post-Covid-19 rebound might see the overall chemical sector have more of a prolongated ramp upward. Globally, Industrial Info expects that third-quarter 2020 could have negative GDP like the second quarter, but what the bounce back will look like depends on the overall health of the global consumer.
Everything goes back to normal on Day One, and we're looking at quite a strong quarter-on-quarter growth through the second half of the year. However, a lot of people have lost their jobs, savings and businesses. The world is not all going to rush out after this crisis and buy a car or fridge.
Industrial Info is looking at China's manufacturing economy, and we see it getting back on track, with local demand improving.
POWER HIGHLIGHTS
Industrial Info's power outage data show outages in the fall of 2020 already much larger than fall 2019, proof that power plant operators are doing just the work they have to this season. Look for this number to grow; also look out for lots more unplanned outages this summer as heat and drought come in, demand soars, and the units that have been run too hard experience problems.
ALTERNATIVE FUELS HIGHLIGHTS
Industrial Info shows that the top ethanol producers are cutting the most production. The larger the plant, the easier it is to survive but still keep operations and employees. Smaller shops don't have the luxury of the deeper buyers with which to hedge.
OIL & GAS PRODUCTION HIGHLIGHTS
Industrial Info is seeing a re-acceleration of demand in China, with all their facilities getting back to normal. This will accelerate the liquefied natural gas (LNG) recovery. Natural gas sites with exposure to automotive and industrial customers are starting to run at full employment capacity, but not necessarily at full operating rates.
Industrial Info sees that demand rebounding in China in these consuming sectors. That may sound like a positive thing, but we look for a major economic contraction in China because it may not be exporting into very healthy markets, so it remains to be seen how quickly activity will normalize.
OIL & GAS PIPELINE HIGHLIGHTS
Industrial Info's view is that pipeline demand for this year will not return to pre-COVID-19 levels, and this will perhaps last into 2021. We are going to see a more extended downturn in shipping contracts than we were expecting, and then a slower recovery than many are forecasting.
Crude oil prices also will likely be lower for longer, even if there is a deal between OPEC and Russia, or if Saudi Arabia agrees to curtail production. There could be problems signing long-term trade agreements with new global buyers.
Industrial Info is seeing a re-acceleration of demand in China, with all their facilities getting back to normal. Producers with exposure to automotive and industrial customers are starting to run at full employment capacity but not necessarily at full operating rates. These facilities are just running to meet demand.
TERMINALS HIGHLIGHTS
Industrial Info is tracking the fact that even though oil and gas products stocks are rising, the rate of rise is decreasing. U.S. oil stocks rose by another 10 million barrels last week and have risen by about 120 million barrels over the last 12 weeks.
But last week's inventory increase was much smaller than in any of the four previous weeks (26 million, 27 million, 33 million and 21 million barrels, respectively), which suggests the margin of oversupply is shrinking. An uptick in U.S. driving seems to be helping close the gap--a good signal for refiners.
Crude storage around the country is now 61% full, but with capacity to store up to another 255 million barrels, according to estimates from the U.S. Energy Information Administration.
FOOD & BEVERAGE
Industrial Info is seeing more project cancellations and delays in the Food & Beverage sector. Not only did COVID-19 strike Gilster-Mary Lee by claiming the life of its president and causing the closure of one plant, but now a second plant is being closed.
Its Steeleville, Illinois, plant makes brands we all know and love, like bakery mixes, snacks, and macaroni and cheese. The plant will be closing shortly. COVID-19 rates in Randolph County, where the plant is located, have more than tripled since April 23, with health officials attributing more than 70% of those cases to the outbreak at the Steeleville plant.
Looking at today's IIR Global Refinery Report, Industrial Info shows certain regions with improved utilizations. The key to recovery will first come with automobile tanks being filled. Gasoline and diesel sales still languish, although lockdown measures are set to ease further in May. Industrial Info predicts a slow but steady return to normal demand. We see this pressure the refiners, of course, but as the table shows, some regions have seen signs of an uptick in road fuel demand over the last week. We still expect a slow recovery to normal consumption, even as the country lifts its coronavirus lockdown.
Last week, sales of jet fuel were down by 95% year on year, while gasoline sales were down 60% and diesel sales were reduced by30%. One European country, Austria, which started relaxing its measures to curb the spread of the coronavirus, allowing small shops, public parks, and stores and gardening centers to reopen, has seen road fuel sales recover somewhat, with gasoline currently only 35% lower and diesel down only 20% on the year.
The hope is that consumers have had enough of staying in their homes and that they are going to drive as much as possible as soon as possible.
That's the best storage the industry can get right now--millions of cars at the pumps. It's similar to when a hurricane is threating landfall--drivers fill up the tanks of hundreds of thousands of cars, and it empties storage fast.
PETROCHEMICAL HIGHLIGHTSIndustrial Info is seeing that a post-Covid-19 rebound might see the overall chemical sector have more of a prolongated ramp upward. Globally, Industrial Info expects that third-quarter 2020 could have negative GDP like the second quarter, but what the bounce back will look like depends on the overall health of the global consumer.
Everything goes back to normal on Day One, and we're looking at quite a strong quarter-on-quarter growth through the second half of the year. However, a lot of people have lost their jobs, savings and businesses. The world is not all going to rush out after this crisis and buy a car or fridge.
Industrial Info is looking at China's manufacturing economy, and we see it getting back on track, with local demand improving.
POWER HIGHLIGHTSIndustrial Info's power outage data show outages in the fall of 2020 already much larger than fall 2019, proof that power plant operators are doing just the work they have to this season. Look for this number to grow; also look out for lots more unplanned outages this summer as heat and drought come in, demand soars, and the units that have been run too hard experience problems.
ALTERNATIVE FUELS HIGHLIGHTSIndustrial Info shows that the top ethanol producers are cutting the most production. The larger the plant, the easier it is to survive but still keep operations and employees. Smaller shops don't have the luxury of the deeper buyers with which to hedge.
OIL & GAS PRODUCTION HIGHLIGHTSIndustrial Info is seeing a re-acceleration of demand in China, with all their facilities getting back to normal. This will accelerate the liquefied natural gas (LNG) recovery. Natural gas sites with exposure to automotive and industrial customers are starting to run at full employment capacity, but not necessarily at full operating rates.
Industrial Info sees that demand rebounding in China in these consuming sectors. That may sound like a positive thing, but we look for a major economic contraction in China because it may not be exporting into very healthy markets, so it remains to be seen how quickly activity will normalize.
OIL & GAS PIPELINE HIGHLIGHTSIndustrial Info's view is that pipeline demand for this year will not return to pre-COVID-19 levels, and this will perhaps last into 2021. We are going to see a more extended downturn in shipping contracts than we were expecting, and then a slower recovery than many are forecasting.
Crude oil prices also will likely be lower for longer, even if there is a deal between OPEC and Russia, or if Saudi Arabia agrees to curtail production. There could be problems signing long-term trade agreements with new global buyers.
Industrial Info is seeing a re-acceleration of demand in China, with all their facilities getting back to normal. Producers with exposure to automotive and industrial customers are starting to run at full employment capacity but not necessarily at full operating rates. These facilities are just running to meet demand.
TERMINALS HIGHLIGHTSIndustrial Info is tracking the fact that even though oil and gas products stocks are rising, the rate of rise is decreasing. U.S. oil stocks rose by another 10 million barrels last week and have risen by about 120 million barrels over the last 12 weeks.
But last week's inventory increase was much smaller than in any of the four previous weeks (26 million, 27 million, 33 million and 21 million barrels, respectively), which suggests the margin of oversupply is shrinking. An uptick in U.S. driving seems to be helping close the gap--a good signal for refiners.
Crude storage around the country is now 61% full, but with capacity to store up to another 255 million barrels, according to estimates from the U.S. Energy Information Administration.
FOOD & BEVERAGEIndustrial Info is seeing more project cancellations and delays in the Food & Beverage sector. Not only did COVID-19 strike Gilster-Mary Lee by claiming the life of its president and causing the closure of one plant, but now a second plant is being closed.
Its Steeleville, Illinois, plant makes brands we all know and love, like bakery mixes, snacks, and macaroni and cheese. The plant will be closing shortly. COVID-19 rates in Randolph County, where the plant is located, have more than tripled since April 23, with health officials attributing more than 70% of those cases to the outbreak at the Steeleville plant.
