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Oil Jumps On Hefty Crude Draw

Oil Jumps On Hefty Crude Draw

Oil prices rocketed on Wednesday…

U.S. Refining Capacity Stays Flat Despite Oil Production Boom

Oil storage

Despite the fact that U.S. crude oil production has been setting records over the past few months, little new additional refinery capacity is being added across the United States, according to research firm Morningstar.

In 2017, operable refinery capacity in the U.S. stood at 18.568 million bpd, slightly up from the 18.402 million bpd capacity in 2016, EIA’s data shows.

“Primary crude distillation capacity is not expected to increase more than a tiny fraction in 2018 either,” Sandy Fielden, director of oil and products research at Morningstar, said in a report on Monday, as carried by the Houston Chronicle.

In the week to June 29, for example, U.S. gasoline production averaged 10.3 million bpd, with refineries operating at 97.1 percent of capacity and processing 17.7 million bpd of crude oil, last week’s EIA inventory report showed.

Crude oil production, on the other hand, has been at 10.9 million bpd over the past four weeks—the highest ever U.S. crude oil production.

In its June Short-Term Energy Outlook (STEO), the EIA forecasts that U.S. crude oil production will average 10.8 million bpd this year, up from 9.4 million bpd last year. In 2019, U.S. crude oil production is expected to average 11.8 million bpd.

Related: Big Oil’s Next Major Move

“Although major oil companies like ExxonMobil have announced plans to expand existing Gulf Coast refineries to process additional shale crude in the coming years, there is little talk of building new large-scale plants,” Fielden noted.

ExxonMobil said last year that it was investing US$20 billion between 2013 through at least 2022 to expand its Gulf Coast manufacturing capabilities as it takes advantage of the U.S. shale revolution.

There may not be talk of large refiners planning large-scale refineries, but there are “plans under way from several small players to build greenfield plants in North Dakota and Texas,” according to Morningstar’s Fielden.

By Tsvetana Paraskova for Oilprice.com

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  • ffgjj on July 09 2018 said:
    This is "breaking news"?
  • Tom on July 09 2018 said:
    US Refining Capacity has always been driven by demand not US Oil Production. US Refining Capacity has been way ahead of US Production for years and still is. What's the point of building additional refining capacity as US Production increases unless your selling into the export market?

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