A wide range of ever-changing economic and other forces, domestic and international, are constantly affecting the US refinery complex, for better and for worse. Fluctuations in crude supply and prices. Ups and downs in demand for refined products. Closures and expansions of refineries. And don’t forget this: the pace of the much talked about transition to low carbon energy sources. There’s a lot at stake in the world of gasoline, middle distillates and waste (renewable fuels, too), and while industry players can’t quite anticipate what’s to come on the rollercoaster of refined products, it is very important to keep up with the latest developments. and have a deep understanding of the many factors that influence oil and fuel markets, and the relationships between these drivers. In today’s RBN blog, we discuss key findings from a recently published Future of Fuels update, an in-depth report from RBN’s Refined Fuels Analytics (RFA) practice on everything you need to know about supply and global gasoline demand in the US. diesel, jet fuel and biofuels in the short, medium and long term.
Notice: Today’s blog is an advertisement for the newly updated RFA The future of fuels report Still, the blog and report delve into topics that are highly relevant to a wide range of energy industry participants and investors.
Even on the best and scariest roller coasters, there are moments of relative calm: a long, flat patch or a slow, gentle climb before all hell breaks loose. The refining industry, and the nascent biofuels market, often follows a similar pattern, and right now most market participants are breathing a little easier. Ultimately, refining margins, while down from their 2022 and early 2023 highs due to incremental refining capacity additions and other factors, remain relatively attractive and, as RFA anticipates in their new report, they are likely to remain well above history. standards in 2024 and 2025. Better yet, as we’ll get to, the ongoing round of capacity additions may be the last burst of industry expansion, and with RFA expecting global demand for refined fuels will remain higher for longer than many. others predict, refining margins are likely to strengthen again in the coming years and remain robust into the early 2040s—yes, 20 years from now.
