Global oil refining production could start rebounding in June, the International Energy Agency said on Thursday, but refiners’ margins may be squeezed due to rising crude prices as producers slashed output much faster than expected.
Refiners throttled back output globally as the coronavirus pandemic sent billions of people into lockdown and cut fuel demand by 30%. Crude prices crashed, prompting the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, agreed to cut oil output by 9.7 million barrels per day (bpd), while other nations have also reduced output.
“If crude supply adjusts more quickly to the oversupply than forecast, this will support crude prices and depress refinery margins, resulting in lower refining throughput than anticipated,” the IEA said in its monthly oil market report.
