On Wednesday CEO of Magellan Midstream Partners LP Mike Mears said that the closures of some inland US oil refineries will give the firm a net benefit in refined products pipeline systems.
Mears commented, “It creates the opportunity for more volume movement to replace what the refinery was putting into the market directly and it will create a longer-haul movement for existing volumes because they need to be transported from farther away.”
Many US oil refineries are closed or shifted in function. Among them are HollyFrontier’s Cheyenne, Wyoming refinery, which is being converted into a renewable diesel plant, and Marathon Petroleum’s shuttering Gallup, New Mexico, refinery.
As the coronavirus pandemic has resurged in some big global economies, crude oil benchmarks have been trading close to the lowest level in three months.
According to Mears, demand for gasoline has stayed at levels lower than predictions and metropolitan areas have lagged behind rural areas in demand.
He also estimated the trend of closing refineries would continue, as the US would move from traditional fuel sources in the future, maybe in the next few decades.
