Australian Institute of Petroleum

995 Words Feb 1st, 2018 4 Pages
“Global oil production will continue to grow as conventional supplies are increasingly complemented by unconventional sources to meet demand. Physical production limits (so‐called ‘peak oil’) are unlikely to be reached before 2035.”
2. Asian excess supply capacity
• “this excess refining capacity helps provide a buffer against unexpected demand or supply shocks”
• “surplus capacity does, however, place competitive pressures on refineries globally, and there will remain a risk of further rationalization in the Australian refining industry as Australia’s relatively small refineries continue to struggle to compete against mega‐refineries in Asia.”
3. Structural change in refining
Based on the IEA’s latest Medium Term Market Outlook (October 2012), structural change is largely the market response to:
• Excess capacity in Asia and Middle East
• changing demand patterns and the makeup of the demand‐barrel (including due to fuel efficiency)
• New sources of supply including unconventional supplies
• Shifts in regional storage, distribution and trade.
In the context of a global surplus of refining capacity, weak demand and tight refining margins, refiners are lowering refinery utilization (as they have done globally to historically low levels) and are closing more marginal refineries. Refinery rationalization since the GFC in 2008 has been, and…
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