(EnergyAsia, March 13 2014, Thursday) — US oil products are set to rise further to break last year’s record high level, predicts research firm GlobalData.
Despite the decline in domestic product demand, the country’s refining utilisation levels have increased significantly in the last few years as foreign demand for US products have surged 70% since 2009, said GlobalData downstream analyst Carmine Rositano.
US refining utilisation averaged 89% last year, up from 83% in 2009, translating into a 1.05 million b/d production increase, with South America among the biggest buyers of its US gasoline and diesel.
There is also demand from Europe and Asia. US Gulf Coast refining industry is supplying ultra low sulphur diesel to Europe and propane and propylene to Asia.
“Since there is minimal, if any, increase in US oil demand expected over the next few years, keeping product export levels high and maintaining growth is key to the financial health of America’s refining industry,” said Ms Rositano.
“The closure of both the Aruba and Hovensa refineries in South America, combined with a lack of major refinery expansions and the persistent refining reliability issues, have all played a role in reducing product supply availability in the region.”
She expects US refiners to expand capacity through new investments in condensate splitters and crude distillation units (CDUs).
“While this will increase product volumes available for exports, competition from other supply sources based on CDU additions in Asia and the Middle East, as well as upgrade units around the world, will determine the profitability and viability to export,” she said.