07 March 2012 01:58 [Source: ICIS news]
HOUSTON (ICIS)--Falling demand for fuels among developed countries is showing no signs of reversing, threatening Atlantic basin refiners with shutdowns, a panel of speakers said on Tuesday.
Disadvantaged refiners in Europe and the US east coast will continue to feel rationalisation pressure, said Bill Sanderson, vice president of IHS Purvin & Gertz, an energy consultancy.
He made his comments during a panel discussion at IHS CERAWeek.
Fuel demand among developed economies is falling because of more efficient automobiles and adoption of biofuels, Sanderson said.
Oil prices, and hence fuel prices, are also rising, a trend that is encouraging consumers to conserve fuel, said Iain Conn, CEO of refining and marketing for BP. He also spoke in the panel.
Rising oil prices also increase funding requirements for working capital, Conn said.
Refiners will unlikely export themselves out of the problem, since shipping costs would be unacceptably high, Conn said. Plus, developing countries, where fuels demand is rising, are building their own refineries.
Instead, successful refiners should have the flexibility to process several different grades of oil, he said.
"Feedstock flexibility will become fundamentally important," Conn said. Maintaining high utilisation rates will also become crucial.
IHS CERAWeek ends on Friday.
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