From OilPrice, March 28:
- Weakening refining margins and carbon taxes put a fifth of global refining capacity at risk.
- Europe and China face the highest closure risk due to declining demand and environmental regulations.
- The rise of electric vehicles and biofuels is transforming the industry, potentially leading to widespread refinery closures.
More than 20% of the total global refining capacity is at some risk of closure as refining margins are set to weaken alongside demand, while carbon taxes could also burden many refiners, Wood Mackenzie has said in a recent report.
Overall, based on expected net cash margins in 2030, Wood Mackenzie has identified 121 out of 465 screened refining sites “at some risk of closure”. This represents a cumulative 20.2 million bpd of refining capacity, or 21.6% of the global capacity last year, WoodMac’s analysis showed.
The energy consultancy sees refiners in Europe and China at higher risk of shutting down because of worsened economics.
European refineries will see their net cash margins decline from 2030 due to the unwinding of free allowances for carbon emissions, while transport fuel demand in developed countries is expected to begin to decline from next year onwards, according to WoodMac’s analysis....
....MUCH MORE
So short or long the refiners? Where's the opportunity?
Same fact set, two possible conclusions. It's like the old joke
about the two shoe sellers sent to Kenya in the early years of the last
century:
1) "Terrible market, nobody wears shoes here".
2) "Wonderful market, nobody wears shoes here".
