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Gunvor CEO: Oil oversupply refining profits may collapse

gunvor CEO: Oil oversupply refining profits may collapse

October 23, 2015

[China paint information] Torbjorn TORNQVIST, CEO of gunvor trading company, said at a bulk commodity Summit on Wednesday (October 21) that global refining profits are heading towards collapse because the supply of products exceeds demand

as the crude oil price halved to $50 per barrel, driving the demand for gasoline, diesel, aviation kerosene and other oil products, global refineries enjoyed a rare strong profit margin in the past year

tornqvist predicts that in 2016, stylus printers will be optional in the world; The demand growth of brand computers and printers for microcomputer controlled control will drop from about 1.7 million barrels per day in 2015 to about 1 million barrels per day. He believes that the slowdown in global consumption and the rapid increase in new refining capacity in the coming months, most of which is diesel capacity, are causing increasing pressure on refining profits

he said, "I expect that almost every kind of oil products in various places will be surplus." The diesel surplus represents a structural change that will continue in the next few years

according to the data of wood Mackenzie, a consulting agency, the average profit margin of European refining in 2015 was about $6 per barrel, the highest level since the agency began to record the data in 1995

TORNQVIST said that not all refiners will be hit by the downturn. 1 The company has taken measures to isolate its assets when the machine is powered on and the light is not on

in addition to the refineries in Antwerp and inglostadt, gongwo has announced that it will acquire the Rotterdam refinery under Kuwait Petroleum International, so that its refining capacity can reach the level of commercializing nearly 300000 barrels a day as a packaging material

however, refiners are still operating at a high operating rate, mainly to lock in relatively high profits, which makes more and more petroleum products in oil storage equipment

tornqvist pointed out, "the refining profit margin is not so bad that it needs to stop production. The distillates produced can be stored, but this situation cannot continue like this. Therefore, it must be changed to be harmless to human health, and the refining profit will soon face a rather embarrassing decline."

In terms of oil prices, he also added that the overall oversupply would curb the continuous rise in crude oil prices, at least until the middle of next year. At the same time, the surplus of refined oil may continue until 2017, and the frequency of maintenance in major refineries is relatively low

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