US refineries benefit from rising crude production
Refiners in the United States have had no reason to complain when it comes to the low operating costs and growing supplies of crude, which makes up the bulk of their feedstock. Thanks to these factors, U.S. refineries have been exporting production at relatively high margins over the past year, allowing for further investments across the value chain.
According to data from the Energy Information Administration (EIA), by July this year U.S. crude production had risen by 0.4 million barrels per day since the start of 2013, following an increase of one million barrels per day last year. Short-term projections predict that production will continue moving upwards, along with output of Canadian crude. This surge of production is likely to prompt U.S. refiners to further explore international markets and to diversify production.
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A recent analysis by Oil and Gas Journal found that the properties of the crude shipped to refiners is changing. For example, the crude coming from U.S. shale basin has lower sulfur content and a higher API gravity that traditional light sweet crude. By comparison, crude that comes from Canada is heavier, sour and diluted by lighter hydrocarbons. The share of field condensate on the market is expected to rise, as condensate output from the Eagle Ford and Permian basins has been increasing. In order to be able to handle this changing mix of crudes, refineries in the United States will have to invest in adjusting their processing capabilities, the analysis said.