Page 14 - FSUOGM Week 34

FSUOGM PERFORMANCE FSUOGM

Russian refining runs rise 4.8% in July

RUSSIA RUSSIAN refineries increased their runs by 4.8% in July, its energy ministry estimates. In May and
month on month in July, according to the energy June, margins were on average negative, owing
Volumes are still ministry’s CDU-TEK data provider, responding to weak demand.
significantly lower than to the continued recovery in fuel consumption. Diesel and gasoline consumption in July was
a year earlier, however. The processing of liquid hydrocarbons in line with the level a year earlier, according to
amounted to 22.24mn tonnes (5.26mn barrels the ministry. Refiners produced 3.57mn tonnes
per day) during the month. While higher than of gasoline last month, which is 1.3% below the
the level in the previous month, it was still 11.6% level in July 2019.
below the volume in July last year. Jet fuel demand will take longer to recover,
Condensate throughput came to 1.65mn given that Russia only partially resumed inter-
tonnes, down 2.4% m/m, while oil processing national flights on August 1. So far these flights
increased 5.4% to 664,100 tonnes. can only go from airports in Moscow and five
The growth in refining was driven by higher other major Russian cities.
fuel consumption both in Russia and the export A key factor behind lower year-on-year
markets its refiners supply. After collapsing as refining runs is the cuts Russia began imposing
a result of coronavirus (COVID-19) lockdown on production in May under the OPEC+ deal.
measures, fuel demand in Russia recovered While authorities have sought to encourage
quickly, catching some refiners that had shut producers to primarily reduce oil exports rather
down units by surprise. than supplies to domestic refineries, this has
Russian refining also returned to profitability been difficult to ensure. ™

European gas storage volumes

reach 90% capacity

EUROPE EUROPE’S gas storage facilities were almost even as many of Europe’s pipeline gas suppliers
90% full on August 18, data published by Gas have seen weaker sales.
COVID-19 is just Infrastructure Europe (GIE) shows, marking an According to GIE, some 995.6 TWh of
one factor behind the unusual high for the time of year. gas is currently in storage in Europe, out of a
build-up in gas storage Europe has seen an unprecedented build-up total capacity of 1,107 TWh. At the same point
volumes this year. in gas storage volumes over the past year, owing last year there was only 977.4 TWh of gas in
to several factors. The continent’s LNG imports storage.
soared in 2019, as higher production capacity in Gas storage levels in Ukraine also con-
the US and elsewhere drove down prices. This tinue to rise steadily, reaching 253.8 TWh on
encouraged increased coal-to-gas switching August 18, GIE data shows, up from 221.2
but also gave traders an incentive to store more TWh a month earlier and 198.4 TWh on June
volumes. 18. Ukraine’s nameplate gas storage capacity is
Towards the end of last year companies 320.3 TWh, but it has not stored this much in
also expanded their stocks in anticipation of a decades.
potential disruption to Russian gas supplies via The country has adopted new measures in
Ukraine. This disruption was averted as Moscow recent years to encourage European traders
and Kyiv were able to agree an 11th-hour deal to use its underground reservoirs, includ-
covering continued transit in 2020. ing reduced tariffs and a customs warehouse
Gas demand has also been weaker this year, scheme. This scheme allows foreign firms to
not only because of coronavirus (COVID-19) keep their gas in Ukraine for up to 1,095 days
lockdown measures, but also unusually mild without paying customs duties and other taxes.
weather in the winter months. Hot weather in These measures have had some success,
recent weeks and a resulting increase in air con- with storage operator Ukrtransgaz reporting
ditions has shored consumption levels, however. on August 5 that foreign companies accounted
This spurred a rebound in prices earlier this for nearly a quarter of the gas in its facilities, or
month. 5.2bn cubic metres. This was almost four times
LNG imports have continued rising in 2020, the volume at the same point last year. ™

P14 www. NEWSBASE .com Week 34 26•August•2020