Research Highlights - Week 2
Core refined products demand in Asia has shown some significant resilience recently on the back of colder than average temperatures in China, with demand in Asia returning to within 1 million b/d (~4%) of 2019 levels by December (see Asian Oil Weekly – Issue 02).
Looking forward, we expect the ability to rebound from covid-related restrictions to remain in place, and core refined products demand may well return almost to within 300,000 b/d of parity with 2019 levels by March.
This comparatively strong showing for Asian demand over 2021, especially vs Europe and North America, is likely to shift some refining margin strength towards the region.
But given a continued reliance on shipping excess middle distillates into WoS markets and rampant refinery overcapacity in EoS, we continue to caution against expectations of refining margin strength in the short term.