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Feb 4 (Reuters) - The coronavirus outbreak is a “black swan event” whose economic impacts are not yet clear, Valero Energy Corp’s chief executive said on Tuesday, adding that the real questions are the length and severity of the outbreak.
“It’s a little early, but when you shut down an economy the size of China, and you limit trade flows going in and out, and we make fuels that move things along, it’s going to have an impact,” Gorder said on Tuesday at the Argus Americas Crude Summit in Houston.
A “black swan event” is defined as an unpredictable event that is beyond what is normally expected of a situation, with potentially severe consequences.
Wuhan is the center of the newly identified coronavirus outbreak in China that has killed over 400 people, with more than 20,000 infected.
“It’s one of those ‘black swan’ events,” Gorder said. “It’s unpredictable. It’s going to happen from time to time. We’ll just work our way through it just like the others.”
Global oil refiners have recently upgraded processing units and adjusted operations to prepare for stricter shipping fuel standards that kicked in on Jan. 1. “I think we’re yet to see this play out completely,” Gorder said. “It’s very early.”
Gasoline demand is likely to be flat to declining in the future due to improving fuel efficiencies, Gorder said, but diesel demand will rely solely on the health of the economy. (Reporting by Jennifer Hiller Editing by Chizu Nomiyama and Dan Grebler)
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