Thread by @paulburrer

Fantastic article here.

“If refineries in the U.S. get damaged during hurricane season, or anything else contributes to the market’s tightness, we could be in real trouble."

reuters.com/markets/commod…

"Two years ago, margins for making fuel were in the dumps due to the pandemic, leading to multiple closures. Now, the situation has reversed, and the strain could persist for the next couple of years, keeping prices elevated."

& with #WindfallTax gonna get worse.

Global refining capacity fell in 2021 by 730K barrels a day, the first decline in 30 years, according to the International Energy Agency. The number of barrels processed daily slumped to 78 mbpd in April, lowest since May 2021, far below the pre-pandemic average of 82.1 mbpd

The United States, according to independent analyst Paul Sankey, is "structurally short" on refining capacity for the first time in decades.

Operating U.S. refiners are running full-tilt to meet demand, especially for exports, which have surged to more than 6 million bpd, a record. Capacity use currently exceeds 92%, highest seasonally since 2017.

"It's hard to see that refinery utilization can increase much," said Gary Simmons, Valero chief commercial officer. "We've been at this 93% utilization; generally, you can't sustain it for long periods of time."

Delayed maintenance dead ahead.

Read the whole article.

Fin