3RD UPDATE: Total Executive: Gasoline Demand Seen Falling In US, Europe
September 14 2009 - 2:22PM
Dow Jones News
Gasoline demand in the U.S. and Europe is expected to fall
through to 2020 due to the recession, climate change legislation
and new refining capacity, a Total SA (TOT) executive said
Monday.
"We are quite convinced at Total that in both regions...the
consumption will decrease very sharply," Andre Tricoire, senior
vice president of refining, said.
Speaking at Platts' European Refining Markets conference in
Brussels, Tricoire said the decline in gasoline demand in the wake
of the global economic slowdown is one of the biggest threats to
European refiners, who are heavily reliant on gasoline exports to
the U.S.
Europe's gasoline surplus could grow to 50 million metric tons a
year in 2020, particularly if U.S. regulations to limit carbon
dioxide emissions and raise vehicle efficiency further discourage
gasoline consumption, he added.
Excess refining capacity is also expected to pressure refining
margins in the short and medium term, he added, even though Total
estimates that only 40% of announced new refinery projects will
come online in the coming years.
Earlier this month, Total said it would shut its entire
137,000-barrel-a-day Dunkirk refinery in northern France in
response to weak demand and slim refining margins.
Total also halted a crude distillation unit at its
331,000-barrel-a-day Normandy refinery in August due to poor
refining economics.
While some analysts forecast a recovery in global oil demand
around the end of the year, any pickup is likely to come from
industrial activity in emerging markets rather than the mature
economies of the U.S. and Europe.
According to David Wech, head of research at Vienna-based
consultancy JBC Energy, gasoline consumption in North America and
Europe is expected to contract through 2020 due to the growing use
of ethanol, hybrid and electric cars, and improvements in energy
efficiency.
More broadly, oil demand from the advanced economies of the
Organization for Economic Cooperation and Development will likely
contract by 1 million barrels a day by 2014, after declining 4.4
million barrels a day since 2007, according to the group's energy
watchdog.
Demand will stagnate in OECD countries due to market saturation,
fuel substitution and greater efficiency, said David Martin, an
analyst at the Paris-based International Energy Agency.
The bulk of global oil demand growth through 2014 will come from
non-OECD countries' need for transport fuel, Martin added.
-By Lananh Nguyen, Dow Jones Newswires; +44 (0)20-7842-9479;
lananh.nguyen@dowjones.com
(Adam Mitchell in Paris contributed to this report.)