|SIn response to the market shift from
gasoline to diesel fuel, European refiners have increased hydrocracking
capacity to increase production of diesel compared to gasoline. Since 1990, hydrocracking as a percent of
distillation capacity has increased from 2% to almost 7%, while FCC capacity
as a percent of distillation has leveled at about 16%.
|SDespite the growth in hydrodcracking
capacity, the deficit in diesel production compared to demand and the excess
in gasoline production has continued to grow.
This is expected to continue for some time, even with continued
hydrocracking capacity growth.
|SThis implies Western Europe may be able to
provide the United States with higher imports in the near future, to some
|SAlso, as both European and U.S. gasoline
specifications become more stringent, more Eastern European refiners may have
the incentive to upgrade as well.