Extract from demand:
European oil demand continued to decline in May, falling y/y by 0.67 mb/d to 14.57 mb/d amid a weak economic backdrop. Demand fell y/y across all EU-5 countries except for Spain (+29 thousand b/d), with Germany (-0.21 mb/d), Italy (-0.16 mb/d) and the UK (-0.14 mb/d) particularly weak. But German demand will likely be revised higher again in keeping with recent trends. Indeed, April European demand was revised up by 0.2 mb/d (all in diesel), taking total demand higher y/y by 71 thousand b/d vs a 0.12 mb/d decline shown last month. May demand in peripheral Europe fell by 0.21 mb/d y/y, but Turkish demand rose by 45 thousand b/d y/y.
Extract from refinery runs:
Refinery runs fell by 0.55 mb/d m/m to 12.07 mb/d in May (-0.16 mb/d y/y), the lowest level since March 2018, as CDU maintenance rose by 0.12 mb/d m/m to 1.63 mb/d (-0.30 mb/d y/y). The contamination of Druzhba flows led to deep run cuts at PCK’s 0.22 mb/d Schwedt, Total’s 0.24 mb/d Leuna, and PKN Orlen’s 0.36 mb/d Plock refineries. We expect refinery runs to average 13.21 mb/d across Q3 19, up by 0.94 mb/d q/q, as margins have improved and the Urals-affected refineries cautiously ramp runs back up.
The closure of the 0.35 mb/d Philadelphia Energy Solutions (PES) refinery is good news for European refiners, as there are few other suppliers capable of boosting exports to the USEC. Of the 0.66 mb/d of gasoline the USEC imported in April, 0.36 mb/d came from Europe and the FSU, but European-origin shipments typically spike much higher in the summer. For instance, Europe- and FSU-origin gasoline blending component imports rose from a low of 0.16 mb/d in January 2018 to nearly 0.42 mb/d in May 2018.