US refiners focus on distillates amid energy transition | – #refiners #focus #distillates #energy #transition

SAN ANTONIO, March 21 (Reuters) – According to industry analysts, USA refineries will seek to maximize diesel and biofuel production for export as they realign operations to reflect declining demand for domestic motor fuels over the next decade.

Rationalization of global refining capacity as global diesel stocks dwindle and demand increases, along with Russia’s ongoing war in Ukraine USA prompting refiners to favor distillates.

At its peak last year USA refineries exported 1.57 million barrels of distillate per day, with profit margins exceeding $70 per barrel, twice that of gasoline.

According to Tudor, Pickering and Holt analysts, distillation margins are about 31.35 dollars/bbl, but they remain twice the five-year average.

Those gains will encourage downstream companies globally to invest in diesel and other high-value products, said John Auers, managing director of Refined Fuels Analytics.

Auers said in a speech at the annual meeting of the Fuel and Petrochemical Producers of America in San Antonio: gasoline there will be factories aimed at production.

For much of the 21st century in the United States, due to the increase in fuel efficiency of engines and the increase in the share of electric vehicles, per capita gasoline demand is decreasing.

In contrast, Auers predicts that demand for total average distillates per day by 2045 10.8 million barrels (bpd) or 32%, diesel will increase by 4.8 million barrels and jet fuel by 6 million barrels.

The growth of transportation fuel production will be directed to biofuels. Refineries such as Marathon Petroleum and Phillips 66 are upgrading their refineries to produce biofuels such as renewable diesel and sustainable aviation fuel.

According to data compiled by Refined Fuel Analytics, renewable diesel production in the U.S. will increase per day in 2022. 10It reached 0,000 barrels, which was more than double the production level of 2021.

Auers said the U.S. will be a significant biofuel exporter by 2025, possibly the world’s largest sustainable aviation fuel and renewable diesel fuel.

Reporting by Laura Sanicola; Edited by Jonathan Oatis

Our standards: Thomson Reuters Trust Principles.

Laura Sanicola

Thomson Reuters

Reports on oil and energy, including refineries, markets and renewable fuels. Previously worked at Euromoney Institutional Investor and CNN.

2023-03-22 01:25:39
Source – reuters

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