Collapse of oil demand threatens the future of some refineries

The global economic shock caused by the coronavirus pandemic has put the future of some refineries at risk, particularly the oldest ones in the Old Continent. Even before the world was changed by the disease of globalization - which at its most critical point wiped out 20% of global demand for oil - several analysts predicted that global refining capacity would have to be rationalized, especially in Europe, according to Reuters news agency. 

Thus, according to the consulting firm WoodMac, consulted by Reuters, at least 1.4 million barrels per day, or about 9%, of refining capacity is under threat in Europe in the 2022-2023 stage. However, this consultant has refused to name the refineries that are at risk. Meanwhile, Goldman Sachs expects global refining rates between 2021 and 2024 to be three percent lower than in 2019, which will increase competition and could prove the closure of certain refineries. 

"By 2023 it could well be that two-thirds of the refineries in Europe will either not be making any money, or will be losing cash," Woodmac's Alan Gelder told Reuters. Goldman Sachs expects global oil demand to return to pre-pandemic levels by 2022. Goldman Sachs analysts have estimated in their latest report that "global oil demand would decline by 8% in 2020, recover by 6% in 2021 and recover completely" to pre-pandemic levels by 2022. 

In its latest report, Goldman Sachs has noted that "demand for jet fuel has been the biggest loser of the COVID-19 crisis", as until a vaccine is available people do not feel confident enough to travel. However, they have warned that consumer behaviour could change in the long term.  For this reason, the U.S. bank does not believe that demand for jet fuel will return to pre-pandemic levels before 2023, according to CNBC, which has accessed this report.