Jan 2016 – Fuel Oil Market Outlook
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China Refining Capacity - Annual
(Source: BP ; in million bpd) 16 14
12
million bpd
10 8 6 4 2 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Jan 2016 – Fuel Oil Market Outlook
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Saudi Arabia Fuel Oil Consumption - Annual
(Source: JODI ; in million bpd) 0.5
0.4
million bpd
0.3
0.2
0.1
Japan is the third largest consumer of fuel oil, however consumption has been decreasing in the last decade. There was a temporary increase in fuel oil consumption in the aftermath of the Fukushima nuclear disaster and the subsequent shut down of all nuclear plants, which required the use of alternative sources for power generation such as fuel oil. Despite this fuel oil consumption is expected to continue to decrease, as nuclear power plants are gradually restarting production and other power sources, like gas are used. Consumption of fuel oil in Saudi Arabia has increased by 35 percent in the last decade as a result of increased power generation needs, especially during the hot summer months.
Jan 2016 – Fuel Oil Market Outlook
; research@
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Index
1. 2. 3. 4.
Consumption Production Trade Final Words
page 3 page 12 page 22 page 32
Global fuel oil consumption has steadily decreased over the past decade as high sulphur fuels have become increasingly unpopular as a result of environmental regulations.
Jan 2016 – Fuel Oil Market Outlook
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Largest Fuel Oil Consumers - 2014
(Source: JODI ; in percentage of total volume)
Others 40%
China Russia 10%
Jan 2016 – Fuel Oil Market Outlook
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Japan Fuel Oil Consumption - Annual
(Source: JODI ; in million bpd) 0.7 0.6 0.5
million bpd
0.4 0.3
0.2
0.1 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (1-10)
Jan 2016 – Fuel Oil Market Outlook
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Global Fuel Oil Consumption - Annual
(Source: JODI ; in million bpd) 9.0 8.0 7.0
million bpd
6.0 5.0 4.0 3.0 2.0 1.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (1-10)
0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (1-10)
Saudi Arabian fuel oil consumption has been increased by 35 percent between 2005 and 2014, reaching just shy of 0.4 million bpd in 2014.
Jan 2016 – Fuel Oil Market Outlook
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China Fuel Oil Consumption - Annual
(Source: JODI ; in million bpd) 1.0 0.9 0.8 0.7
million bpd
0.6 0.5 0.4 0.3
Teapots were only allowed to purchase crude oil from state-owned oil companies and trading houses. In early-2015 the Chinese government lifted the ban on teapots importing crude; as a result fuel oil consumption is expected to decrease, as teapots increase the use of crude oil for feedstock.
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Fuel Oil Market Outlook
(Covering Consumption, Production & Trade)
January 2016
bancosta blue studies – volume WET 2016/#1
banchero costa research
Japan’s fuel oil consumption temporarily increased in the aftermath of the Fukushima accident, as alternative energy sources were utilized. However consumption has since continued decreasing.
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China Refining Capacity - 2015
(Source: JYD ; in percentage of total capacity)
Teapot Refineries, 32%
Major Refineries, 68%
Teapot refineries account for 32 percent of total capacity. Teapot refineries traditionally accounted for a significant part of fuel oil imports which they had used as feedstock until the recent reform that allowed them to import crude .
Jan 2016 – Fuel Oil Market Outlook
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Consumption
(Demand Drivers & Consumption)
Jan 2016 – Fuel Oil Market Outlook
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In this report we look at residual fuel oil, which is what remains after the distillate fuel and lighter hydrocarbons are distilled away during the refining process. Fuel oil is mostly used for power generation, as a bunker fuel or as an industrial fuel. Global fuel oil consumption decreased approximately 29 percent between 2005 and 2014 to 5.6 million barrels per day (bpd). The decrease in consumption has been driven in part by increased regulation on high sulphur fuels in an effort to curb pollution. China is the biggest consumer of fuel oil, accounting for 11 percent of global consumption in 2014. Russia and Japan accounted for an additional 10 percent and 7 percent respectively. China imports a significant part of the fuel oil it consumes. Traditionally teapot refineries had to complement crude oil with fuel oil for feedstock as a result of legislation banning them from importing crude oil.