Severe epidemic, India's crude oil processing volume and oil demand will be frustrated

Foreign news agency reported on April 26 that despite the number of domestic new crown pneumonia infections hitting record highs, Indian refineries are still trying their best to avoid drastically reducing crude oil processing
.
However, the strengthening of regional blockade measures and their impact on liquidity and industrial activities will slow down future oil demand, thereby forcing refineries to reduce crude oil processing capacity
.


However, analysts believe that the reduction in crude oil processing volume may not be very large, because export demand for some refined oil products is still active, and other economies and oil-consuming countries in the region are on a slow recovery path
.


Alex Yap, a senior energy analyst at S&P Global Platts Analytics, said, “I think that in April and beyond, India’s crude oil processing volume will be reduced to a certain extent because of the increase in areas where lockdown measures are implemented, and The number of infections has risen
.
”

In the past seven days, India has added more than 2 million confirmed cases, the highest number of infections in the world in seven days
.


However, Indian Prime Minister Narendra Modi said in a speech on the 20th that compared with the first wave of the epidemic last year, India is well prepared for the fight against the epidemic this time
.
It urged provincial leaders to focus on local area control and use blockade measures only as a last resort
.


The latest data released by the Ministry of Health of India on the 26th showed that the number of new confirmed cases in the past 24 hours exceeded 352,000, reaching a record peak for the fifth consecutive day, and the cumulative number of confirmed cases of new crowns exceeded 17 million
.


On the 25th, Prime Minister Modi urged all citizens to be vaccinated and exercise caution, saying that the storm had shaken the country
.


  ING Economics stated in a research report, “Blockade is not difficult, but for the world’s most populous country, blockade measures are not an effective means to contain the epidemic.

.
The road to economic recovery is accompanied by the outbreak of the second wave of epidemics, and the growth of physical activities has begun to weaken
.
And after the severity of the second wave of epidemics is exposed, this trend will continue with further restrictions on economic activities
.
"

  As of March, the refinery operating rate remained active

  until the end of March, and the Indian refinery operating rate remained active
.
According to survey data from the Ministry of Petroleum, the average operating rate of various refineries in India rose from 97% in February to March.
of 99%
.


  in March state-owned refinery operating rate of 106%, 102% over the same period last year, February was 107%
.


  leader - Indian Oil Corporation (Indian Oil Corp.
, IOC) 's nine independent refineries 3 The combined operating rate for the month averaged 100%, compared with 98% in the same period last year and 101% in February
.


  India’s second-largest state-owned refinery company, Bharat Petroleum Corp (BPCL), averaged its operating rate in March It was 118%, 116% in the same period last year, and 127% in February
.
The

  third-largest state-owned refiner, Hindustan Petroleum Corp Ltd.
(HPCL), had an average operating rate of 118% in March.
It was 113% in the same period and 114% in February
.


  An executive from an Indian refinery said, “The outlook for Indian oil demand is not clear right now
.
At present, our operating rate exceeds 95%, and whether it will decrease in the future will depend on the demand situation
.
"

  Signs of slowing demand are beginning to emerge.
During the trade cycle in June, crude oil traders have been adopting an unhurried attitude to purchase crude oil
.
This has had an impact on the high-sulfur crude oil in the Middle East.

.
Spot Dubai crude oil hit an eight-week low on April 22
.


  In 2020, India’s oil demand fell by 470,000 barrels per day, and the country’s refined oil consumption fell to its lowest level in nearly two decades due to the first round of the epidemic
.


  Demand will not decline.


  Analysts believe that India’s efforts to avoid a national blockade will continue to expect an increase in oil demand in 2021, but the increase may be more moderate
.


  Lim Jit Yang, an Asia-Pacific energy market consultant for Platts Analysis, said, “Some regions and provinces have implemented lockdown measures
.
Therefore, we have revised down the forecast for India’s total demand for refined oil products in 2021 from 440,000 barrels per day last month to 400,000 barrels per day
.
Whether to further adjust the forecast depends on the development of the epidemic
.
"

  A fuel market insider from Bihart Petroleum Company said that it is expected that Indian refineries will generally maintain their original gasoline production plans in the second half of April.
, As the cracking spread in the Asian mid-quality distillate market is at a healthy level, it may encourage suppliers to chase strong export profits
.


  However, some refineries may consider cutting jet fuel and diesel production.
In the short term, air transportation and industrial fuel demand will be frustrated by the suspension of important international routes to and from India, and major construction projects are reported to avoid a large number of people gathering.
The work environment is suspended
.


  An executive of a private refinery said, "We will see some declines in operating rates, and they will start this month, but the good news is that demand for refined oil exports is active
.
Therefore, we believe that operating rates will not drop significantly
.
"