Refiners in the United States may be boosting fuel production too early, Bloomberg has reported, citing the latest data on refinery runs and utilization rates.
Refinery runs in the week to June 4 stood at 15.9 million bpd, according to the latest weekly report from the Energy Information Administration. Capacity utilization rose to 91.3 percent. According to Bloomberg, the refinery run figure is the highest since February last year, before the pandemic wreaked havoc on transport and fuel demand. The capacity utilization rate, for its part, is the highest since January 2020 and has been on the rise for four weeks in a row.
Demand for fuels is indeed improving, and traffic levels are almost back to pre-pandemic levels. However, gasoline demand has been falling while supply has been rising, Bloomberg notes.
Meanwhile, Argus reports that exports of gasoline are on the rise from the Gulf Coast. Loadings of gasoline in the first half of June have topped pre-pandemic levels at 810,000 bpd, Argus reported. This compared with 340,000 bpd in the sale period last year and 720,000 bpd in the first half of June 2019.
The report cited the high cost of compliance with the U.S. Renewable Fuel Standard and growing gasoline demand from Mexico, which is replenishing its reserves of the fuel.
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These exports would need to rise further to avoid a glut, Bloomberg wrote, citing consultancy Energy Aspects. Meanwhile, demand for fuels will continue to rise in the coming weeks, and fuel stocks should fall below the five-year average next month, Energy Aspects also forecast.
According to GasBuddy, gasoline demand in the United States could hit a record high this summer of between 9.4 and 9.8 million bpd, despite rising prices at the pump. But on some days, this could rise to over 10 million bpd, the head of petroleum analysis at GasBuddy, Patrick De Haan, said in late May as quoted by MarketWatch.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.