Dangote Refinery may produce at its full capacity of 650,000 barrels per day by the second quarter of this year.
This comes as China leads global oil demand to two million
barrels per day (bpd), thereby increasing the total demand to about 103 million
bpd.
Wood Makenzie, in a new outlook obtained by The Guardian,
yesterday, showed that a modest increase of 600,000 bpd would be added to
refining capacity this year.
The projection noted that the increase would be met with
high utilisation rates and the successful ramp-up of the Middle East capacity.
The report zeroed in on Dangote Refinery as a key game
changer, stressing that the facility would be ramped up successfully to full
capacity of 650,000 bpd by the end of the second quarter of the year.
“As OPEC+ production returns the refinery yield of middle
distillates, such as jet and diesel/gasoil, will rise from a heavier global
crude slate,” Senior Vice President of Research at Wood Mackenzie, Alan Gelder,
said.
Gelder, however, said the easing of interest rates and
re-balancing of gross domestic product (GDP) are critical to distillate demand
growth.
The research body noted that the demand for crude oil is due
to rise by almost two million barrels a day in 2024, with China accounting for
over 25 per cent of that increase.
The report – ‘Oil and Chemicals: Five Things to Watch in
2024’ – states that alongside China, other key markets for growth include three
emerging markets in Asia – Indonesia, Vietnam, and Thailand – as well as the
US.
“Much of the growth (in oil demand) will be coming in the
second half of the year,” Gelder said, adding that “this will be fuelled by
improving economic growth and lower interest rates”.
The report adds that oil supply would lag demand growth as
OPEC+ supply cuts slow growth across 2024.
It added that without this production restraint, the market
could tilt to oversupply, especially if demand growth is below expectations.