Dangote Refinery to Reach Full Capacity in June as Crude Demand Up by 2mbpd

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.

January 12, 2024