IEA Warns of Winter Heating Oil Crunch in the West
LONDON, July 11 (Reuters) - Oil refiners in the West may be struggling with low gasoline stocks but the situation could be even worse this winter for inventories of heating oil and diesel, the International Energy Agency warned on Tuesday.
In its monthly Oil Market Report the IEA said that refiners obliged to maximise gasoline supply in the United States and Europe were allowing a growing deficit in the distillates stocks that make up heating oil and diesel.
"The situation ... warrants serious attention. Because of low gasoline stock levels in the U.S. and Europe, refiners are maximising gasoline production at the expense of heating oil," the Paris-based agency said.
"If gasoline production were maximised on both sides of the Atlantic, further erosion of gasoline stocks could be prevented. But the distillate gaps would widen."
The deficit in distillates stocks in Europe could deepen versus last year from 47 million barrels in the second quarter to 58 million barrels in the fourth quarter, the IEA said. In the U.S. the deficit could widen from 28 million barrels to 57 million barrels.
"It's not just in the U.S., Europe will also suffer," said David Knapp, the head of IEA's oil market division. Heating oil stocks last year were the lowest in a decade.
While the outlook for crude oil stocks looks more comfortable, particularly if Saudi Arabia soon adds more supply, the IEA's data for inventory builds during the second quarter for industrialised countries shows a heavy downward revision.
The agency's estimate for stockbuilds of crude and products in the OECD during April was revised down by one million barrels daily to just 700,000 bpd. It now estimates a 1.7 million bpd OECD build during May compared to a forecast last month of three million bpd.
The IEA said it recorded an abrupt turnaround in oil products consumption in OECD markets in May after declines in previous months.
But after two months of downward revisions, the agency left unchanged its projection for world oil demand this year at 76.2 million bpd, up from 74.9 million bpd in 1999. |
