Refiners, churning out fuel, boost oil demand
http://www.chron.com/business/energy/article/Refiners-churning-out-fuel-boost-oil-demand-12446981.php December 21, 2017
Oil demand may jump in the new year as U.S. refiners plan to take fewer units offline than last winter, freeing them up to churn out more fuel.
Crude unit shutdowns in the first two months of the year are expected to be 35 percent below winter 2017, according to data from Energy Aspects Ltd. March outages are seen falling 55 percent from the prior year, potentially increasing crude demand at a time when U.S. supplies are already at the lowest since October 2015.
"If you have less turnarounds, refiners are going to be demanding more crude, so a lighter turnaround season is supportive for crude prices," Andy Lipow, president of Lipow Oil Associates in Houston, said by telephone.
Refiners that take advantage of a lighter maintenance season to produce more fuel could help extend a crude price rally that has seen WTI futures jump nearly 18 percent since early October. On the other hand, churning out more product at a time when seasonal run rates are at the highest level in at least two decades threatens to weaken profit margins.
Winter turnarounds in 2018 initially looked heftier. Hurricane Harvey hit the Texas Gulf Coast in August, prompting at least 13 refineries from Louisiana to Montana to delay fall maintenance.
While some plants pushed work to the first quarter of 2018, others including Exxon Mobil Corp.'s Joliet refinery near Chicago rescheduled by just a few weeks. Other refiners are pushing work even further out....
