Refiners are preparing for a late 2019 boom, but the reasons aren’t a good sign. Oil refineries in Europe and the U.S. are limiting planned maintenance shutdowns by 60% in anticipation of production surge due to new rules set to go into effect in January 2020.
Those rules, aimed at cutting sulfur emissions from cargo vessels will directly affect the midstream sector as oil shippers are the target of these rules. Regardless, producers of marine gas oil will have to meet the demand for low sulfur fuel.
As the shipping industry appears to be well behind on compliance, refineries are planning ahead in assuming 2020 shipments will be cut and will be more costly.
The Coming Refining Boom: Not a good sign for producers (May 2019)