German refineries cut runs on low demand

Several refineries in Germany have reduced production because of a significant drop in fuel demand and high stocks arising from efforts to stop the spread of the Covid-19 pandemic.

At least five refineries in the country have cut runs because of low demand, and a further two have said they will do likewise if demand remains weak. Many buyers in the domestic wholesale market have negotiated down their term volumes for April because of a 30-50pc loss of demand at retail stations in late March.

Miro's 301,000 b/d Karlsruhe refinery is running at two-thirds of capacity. OMV, which operates the 68,000 b/d Burghausen refinery, has said it has adjusted production at its refineries according to circumstances. BP has reduced throughput at its 82,000 b/d Lingen refinery, and its 265,000 b/d Gelsenkirchen plant is undergoing maintenance until mid-May.

A delay to post-maintenance restart at the 90,000 b/d Neustadt part of Bayernoil's 210,000 b/d Neustadt-Vohburg refinery is likely to be linked to low demand. The turnaround finished as planned on 6 April but restart will take a further two weeks. Majority shareholder Varo said it is reviewing production according to the market situation. Minority shareholder Eni has cut runs at most of its Italian refineries to the minimum 60pc. Local buyers have heard from several sellers out of Bayernoil's depots that no heating oil will be available on the spot market until 20 April.

Klesch said its 100,000 b/d Heide refinery is preparing for a period of potentially lower output and it already sees a fall in demand.

Shell could adjust output at its 310,000 b/d Rhineland refinery complex in Cologne, as it is studying demand for its refining planning. The company is reducing its throughputs globally to 80-84pc of capacity. It also has stakes in the 301,000 b/d Karlsruhe refinery and in the 208,000 b/d PCK Schwedt plant near the Polish border.

By Alina Rapoport

source: Argus Media