MEXICO DATA: Demand growth drives 100% rise in diesel imports amid tight balances

Quantum Commodity Intelligence - Healthy demand for refined oil products in Mexico, led by fuel oil and road transport fuels, saw both product imports and refinery output hit highs in April, according to the latest data from state-oil company Pemex.

Product deliveries, a proxy for demand, increased 3% to 1.372 million barrels per day, the highest level since at least the start of 2020 and up 26% from April 2021, as demand continued to recover from pandemic lows.

Both diesel and gasoline deliveries were also at minimum 27-month highs of 285,000 bpd (+8% on month, +49% on year) and 700,000 bpd (+1% on month, +24% on year), respectively.

Mexico sits just outside the top 10 most oil-consuming countries in the world, and, although it has a large domestic crude oil and refining industry, an increase in product imports came at a bad time for global balances in the aftermath of Russia's invasion of Ukraine.

Mexicos's imports of refined products reached a four-month high of 661,000 bpd in April, driven by a doubling on the month in diesel inflows to 172,000 bpd and a 10% increase for gasoline to 390,000 bpd.

Gasoline stocks in the Amsterdam-Rotterdam-Antwerp hub dropped to a year-to-date low last week as Europeans exported the light end product across the Atlantic to make up for a switch to distillate production by US refiners rushing to meet Mexican demand.

The US is also now considering releasing stockpiles of diesel on its East Coast after PADD 1 inventories hit a historic low at the start of May.

The higher imports came despite a new post-pandemic peak in Mexican refinery output, which grew 6% on the month to 997,000 barrels per day last month, the highest level since at least the start of 2020 and up 39% from April 2020.

This included an 11% rise on the month in gasoline output to 302,000 bpd and 19% growth for diesel to 182,000 bpd. The shift came at the expense of LPG (-13% to 90,000 bpd) and fuel oil (-3% to 254,000 bpd).

For a full round-up of Mexico's crude and refined product fundamentals and trade data, visit Quantum's Data Dashboard.