Refinery Utilization Plans Tell Story Of Strong Oil Products Demand in U.S.

By Julianne Geiger - May 16, 2023

U.S. crude oil refineries are planning to run at a rate of 94% utilization this quarter, according to company forecasts and analysts, Reuters said on Tuesday. U.S. total refining capacity is estimated at 17.9 million barrels per day.

U.S. refiners have been running at 91% of their operable capacity for the week ending May 5, according to the latest EIA data presented in its Weekly Petroleum Status Report published on Wednesday mornings.

Gasoline production was on the rise, averaging 9.8 million barrels per day for the week, while distillate production also rose to an average 4.6 million barres per day. Total products supplied rose over the four-week period ending May 5 to 19.9 million bpd—up 2.5% year over year, with gasoline seeing a 2.2% rise for the same period last year, and distillates up just 0.1%.

While the United States has yet to undertake a major project such as a new refinery, some refiners have added units to their existing refineries or upgraded to increase their throughput.

Last year at this time, U.S. refinery utilization was at 90%, although utilization often increases in the second quarter as we head into summer travel season. It often isn’t until September that we see refinery utilization dip back below the 90% threshold, EIA data shows. But last year, refinery utilization was up above 95% into the winter months.

This year, with gasoline inventories 7% below the five-year average for this time of year, and distillate inventories a staggering 16% below the five-year average, refiners are anticipating that utilization rates will remain high.

Marathon Petroleum has said it plans to run at 91% of capacity, Reuters said, while Valero plans to run between 90% and 93%. Phillips 66 said it plans on a utilization rate in the mid-90s.

By Julianne Geiger for Oilprice.com