International Energy Agency says refiners’ margins may be squeezed on higher prices as producers cut output
An employee works on at the Centenario deep-water oil platform in the Gulf of Mexico off the coast of Veracruz, Mexico. Picture: REUTERS
In recent days, several Opec nations including Saudi Arabia said they will cut output more than originally pledged. Producers in the US and Canada have cut production by 1.7-million bpd, much faster than expected. Oil demand in April slumped by about 25%, or more than 25- million bpd, IEA monthly figures showed, in reaction to global lockdowns. In the US, refining capacity use fell to 68% in the most recent week, just off an all-time low, the US Energy Information Administration said.
“My phone has been blowing up in the last 10 days with refiners really scrambling to get more volumes, both short term and long term, because these shut-ins have impacted purchasers a lot quicker than they thought,” said John Zanner, senior strategist at Uplift Energy Strategy, which works with producers to market barrels.
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