U.S. refining utilization levels have increased in the last few years as foreign requests for U.S. products have grown by approximately 70 percent since 2009, according to analyst with research and consulting firm GlobalData.
Carmine Rositano, GlobalData's managing analyst covering downstream oil & gas, says U.S. refining utilization averaged around 83 percent in 2009, increasing to approximately 89 percent in 2013.
A 1 percent growth translates into 175 thousand barrels per day (mbd), and a 6 percent increase in refining utilization results in 1 million barrels per day (mmbd) of higher refining runs.
“Since there is minimal, if any, increase in U.S. oil demand expected over the next few years, keeping product export levels high and maintaining growth is key to the financial health of America’s refining industry,” says Rositano.
South America is currently one of the main importers of U.S. gasoline and diesel, as the growth in product demand has significantly outpaced product supply increases in South America..
The U.S. Gulf Coast refining industry is also seeing demand from European countries for ultra-low sulfur diesel, which is in a structural product deficit position in the region. In addition, the U.S. is exporting high volumes of propane and propylene to Asian countries.
With refining utilization at high levels, Rositano believes the ability to continue increasing product export levels from the U.S. will be based on planned new capacity additions, both for condensate splitters and Crude Distillation Units (CDUs).