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Asian 2000 oil product demand seen up 830,000 bpd

SINGAPORE: Asian demand for petroleum products is expected to rise 830,000 barrels per day (bpd) in 2000 from 1999, Merrill Lynch said in a report.

The forecast was included in a report dated February 14 but seen by Reuters on Monday.

The report said estimated demand rose 650,000 bpd in 1999 after demand had declined 500,000 bpd in 1998.

Merrill said Asian production capacity for petroleum products would rise 500,000 bpd in 2000, "well below demand growth."

That would leave an estimated supply deficit in 2000 of 1.7 million bpd, from 1.3 million bpd in 1999, rising to 2.9 million bpd by 2002, the report said.

In a break down, Merrill said that most major countries in Asia would show demand growth in 2000, with the exception of the Philippines, which was expected to see demand decline more than 50,000 bpd.

Demand in China, India and South Korea was expected to grow more than 150,000 bpd in each country, although for South Korea this would represent a slowdown from 1999's estimated growth of 200,000 bpd.

The improved demand/supply picture for Asia would translate into better profit margins for the key refinery centre in Singapore.

"We have allowed for a moderate recovery in Singapore refining margins back into the black during 2000. In our view, the single biggest threat to our scenario is the question of whether or not the voluntary throughput restraint undertaken by the region's oil refiners will be maintained through 2000," the report added.-Reuters