This month, refinery production globally will exceed that which it was producing since the start of 2020 and the COVID-19 pandemic, according to the International Energy Agency's Oil Market Report.
Refinery production surged in November and is forecast to continue to rise this month, recovering 42% of 2020’s decline. Next year in 2022, the report forecasts average production to close in on pre-pandemic levels.
"The surge in new Covid-19 cases is expected to temporarily slow, but not upend, the recovery in oil demand that is underway," said authors of the report.
Additionally, Bloomberg recently reported that U.S. Gulf Coast refineries are processing sour crudes into fuel at the highest margins in four years, largely due to cheap shale gas.
Cheap U.S. natural gas supplies allows refiners to extract low-cost hydrogen needed to remove sulfur from the fuel made with sour crudes, putting what was just out of favor a few months ago back in demand again. Europe and Asia, on the other hand, are dealing with surging natural gas prices this winter.
The U.S. Department of Energy said it would soon announce a new sale tender offering 18 million barrels of sour oil from the Strategic Petroleum Reserve, as part of a previous plan to try to reduce gasoline prices.
