Data providers have revealed that US oil refineries are planning to conduct twice as many maintenance overhauls this spring compared to the usual number , as the European Union’s ban on Russian petroleum products imports takes effect. To resume maintenance that was delayed due to pandemic & the opportunity to benefit from record – high margins is the aim .At least 15 US oil refineries are planning maintenance outages lasting between 2 to 11 weeks through May, according to Reuters & refining intelligence firm IIR Energy. The result is a drop of 1.4 million barrels per day of processing capacity by mid-February ,which is double the five-year average. A tightening of supplies of gasoline & diesel & an increase in margins is the result.
Many plants were hesitant to shut down operations last year, owing to strong margins, but now they must complete necessary maintenance , opines refining analyst John Auers of Refined Fuels Analytics. The IIR & Reuters sources reported that nine US refineries operated by major companies such as Marathon Petroleum, Valero Energy, Exxon Mobil, Phillips 66,& BP will be closing some of their fuel production units, during the spring. In addition to this, Total Energies is planning to restart the majority of units at its Port Arthur, Texas refinery, which were closed in late December owing to extreme cold weather.
There are high margins in fuel production, & there is continuity of rise with the planned maintenance outages. Currently the gasoline crack spread is around $26 per barrel, which is $5 higher than last year.AT present the margins for heating oil are even higher at $58 barrel, more than double the levels of the previous year. At present, inventories of US gasoline are at 226.8 million barrels, in comparison to 240.7 million at the same time last year. The capacity of refineries is 8% lower than it was before storm Eliott. The director of energy futures, Bob Yawger, said that refineries will have a difficult time catching up with the struggling refinery row.
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The market will have soon an additional capacity. The startup procedures have been begun by Exxon for its $2 billion expansion of the Beaumont, Texas refinery. Iraq’s Karbala oil refinery & Kuwait’s al-Zour refineries will also start operating soon. John Auers, the refining analyst , says that these new plants along with others across the world in the first half of the year , will prevent any major shortages of products.