& Tobago

Very usefull links


News links




Dow Jones

Oil price



Views and News




U.S. refiners boost processing capacity to accommodate shale -Moody's



By Erwin Seba

Petroleumworld 11 05 2018

As U.S. oil production rises - setting records in average daily output nearly every month this year - the companies that convert crude to diesel and gasoline are increasing their ability to consume more crude and generate higher profits.

Using more efficient equipment and running bigger plants at peak speeds, the combined capacity of nation's 135 refineries was 18.6 million barrels per day (bpd) at the start of the year, up 16 percent over the 15.7 million bpd in 1985, when there were 223 refineries, according to Energy Information Administration data.

Demand for new products coming from these expansions “will lead to higher refinery utilization, higher distillate prices and higher refinery margins generally,” Arvinder Saluja, a senior analyst at debt ratings firm Moody's Investors Service, wrote in a report on Thursday.

U.S. refinery utilization, or how much of the capacity is being used, hit a record 98 percent in early August, the EIA said. Utilization differs from capacity due to weather or maintenance disruptions, market demand and other factors.

This year, high production and ample supplies of shale and heavy Canadian oil have made U.S. refiners very profitable. Refining income this year through September at Phillips 66 was $1.94 billion, up 87 percent from the year earlier. Valero Energy's refining business posted an operating profit of $3.64 billion, up 21 percent.

Just as shale producers are exporting more, U.S. refiners which convert crude into low-sulfur fuels should be able to drive exports of marine fuel and profits higher next year. Earning from such sales can remain strong through “at least 2022,” Moody's Saluja said.

Between 2012 and 2017, exports of finished U.S. refined products climbed by 772,000 bpd to 2.79 million bpd, accounting for a national increase of refined products exports of 735,000 bpd to 3.34 million bpd.

Consolidation is also lifting refiners' outlooks. Last month, second-largest refiner Marathon Petroleum Corp acquired fifth-largest Andeavor in part to gain Andeavor's ability to process shale and because of its retail gasoline network in Mexico.

Six of the 10 largest U.S. refineries are owned by oil producers, including Motiva, owned by Saudi Aramco ( IPO-ARMO.SE ), Exxon Mobil Corp and Chevron Corp .

“There is an enormous opportunity,” said Ken Medlock, senior director of energy studies at Rice University's Baker Institute for Public Policy. “The more functionally effective you are the more likely you are of turning a profit.”


Reporting by Erwin Seba; Editing by Cynthia Osterman from Reuters .

11 02 2018

Copyright© 1999-2018 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.

Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1

November 13 - 15, 2018.

Gubkin University, Moscow
SPE Student Chapter







Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.