Tag Archives | refining

Saudi lets ‘market decide’ on oil prices to maximise local jobs

I was kindly invited last week to give a keynote address at the annual ME-TECH conference in Dubai.  Naturally, there was intense interest in my argument that oil prices were most unlikely to recover to the $100/bbl level. Instead, I suggested they would likely return to their long-term historical average of $33/bbl (in $2014).  And I argued that this would be good news […]

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Shell CEO says Europe needs to leverage chemicals clusters

There are 2 ways to improve operating rates in an industry.  One is to increase volumes, the other is to reduce capacity.   The latest APPE data covering H1 2014 for European olefin capacity highlights how the European petrochemical industry has successfully used both mechanisms over the past year to improve its position: Ethylene volume increased to 9.8MT, versus […]

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ExxonMobil Antwerp to spend $1bn boosting diesel capacity

When the world changes, companies either change with it or go out of business.  The market for stagecoaches was never the same once cars came along.  And not many students use slide rules today, now calculators are available. Usually, of course, these market changes are slow-moving.  So companies often fail to respond in the hope the old world […]

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Recovery has been delayed, again

Recovery has been delayed, again.  That is the clear message from the blog’s extensive discussions with key executives in global and regional markets over the past 2 weeks. In summary as this ICIS video interview suggests, the picture is as follows: Base chemical demand has broadly fallen from peak levels in Q3  Most chemical buyers built inventory in […]

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New propylene supply increases market uncertainty

Almost unnoticed, an important shift is underway in propylene markets. Propylene (C3) is the second largest olefin after ethylene, with production around 75 million tonnes in recent years. Its main sources are steam crackers and refineries – neither of which see C3 as their core product. Thus the recent increased use of ethane as a […]

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EU olefin operating rates slip back to 81%

The latest EU olefin operating rates (OR%) were very disappointing, even though they were not a surprise. As the chart shows, ethylene rates were just 81% (based on APPE data). They were far below the 90%+ rates that were normal before the crisis began. These rates would normally have left the industry in crisis mode […]

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Global economy weakens as China oil demand drops

There seems little doubt that the global economy is now entering a new downturn. Pessimists may worry that it has already begun in Q3. Optimists might hope it will be delayed till Q4, or even Q1. But almost all major indicators are pointing in the same direction. • On the macro-level, the latest American Chemistry […]

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Europe’s supply-led ethylene market continues

Q1 saw near record margins for European petchem producers. And there was also a scramble for product, as buyers rushed to secure product ahead of feedstock price-related increases. But this remained a supply-led market. As the chart above shows, based on APPE data, Q1 production (red triangle) was just 5.1 million tonnes. It was slightly […]

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ExxonMobil sees Integration as key strength

The blog is a great believer is learning from the secrets of the world’s most successful chemical companies. Thus it was fascinated to read a report by ICIS’s Stephen Burns of a major speech by ExxonMobil (EM) president Stephen Pryor. Pryor warned that “capturing the benefits of downstream integration requires more than simply co-locating petrochemical […]

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INEOS plans refining/technology JVs with PetroChina

The Falkirk Herald, INEOS’s local newspaper in Scotland, has had to wait a long time for its ‘scoop’ of June 2009 to be confirmed. It had reported then that INEOS was in talks with PetroChina about the future of the Grangemouth refinery. As PetroChina noted at the time, “downstream business has a poor margin nowadays […]

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