|SOne of the problems seems to come from some
market observers making a comparison of world product demand and world
refinery capacity. A balance of 83 MMB/D of capacity against 82 MMB/D of
demand seems to imply a very tight situation.
But one needs to look more closely.
Petroleum demand is not just supplied by refineries. For example, the U.S. has over 20 MMB/D of
demand and only 16.0 MMB/D of refinery
inputs plus 1.4 MMB/D of product imports.
Gas liquids and other hydrocarbons and oxygenates contribute more than
10 percent of supply volume.
|SIn order to see a reasonable picture of
refinery utilization on a global scale and how that utilization might affect
U.S. markets, it is necessary to look at regional refinery markets, since the
refinery status in different regions can have different implications for U.S.
|SHowever, while our view is more restrained than some other analysts
that state that world refining capacity is “maxing out”, it is correct that
product demand is growing faster than refinery capacity in recent years, and
the situation could become even tighter if high demand growth continues.