As reported in the US Energy Information Administration (EIA)’s Petroleum Supply Monthly, the US refiners had slashed crude intake and output in the most intense period of coronavirus-related lockdown in the country.
In April 2020, gasoline production plunged to merely 41% of the total capacity while in the year prior it was 45%. Jet fuel output halved to below 5% from 10%, but on the contrary distillate fuel output surged to higher than 38% from April last year’s 30%.
Crude oil intake volume and other inputs into their distillation units were cut to be at 70% of the maximum capacity in April, down from 89% in the same period a year ago.
The operation rate of their catalytic crackers was lowered to only 59% from the nameplate capacity, down from 81% in April 2019. Hydrocracker usage slumped to 56% from 71%, and catalytic reformers were down to 61% from 80%.
The change was due to the blow faced by all three major fuels’ consumption rate. In April, jet fuel consumption nosedived by 61% year-on-year while gasoline slumped by 37%. Although still posted a fall by 12%, distillate yearly consumption in the month dropped the lightest compared to the others.
The double swift in refinery operations really did minimize the overall build-up of fuel inventories and gasoline, but also left refiners with too much diesel which in the end weighed down the commodity’s prices worldwide in the past few months.
Currently, the diesel is overhanging the market and further depressed the prices. The refiners are working to bring the massive stocks of the less-refined distillate fuel oil by maximizing gasoline production and still limiting crude processing.
At the moment, US refiners are producing around two-thirds more gasoline compared to the combination of distillate and jet fuel, up from the equal volumes in April.
Looking ahead, Reuters market analyst John Kemp estimated distillate inventories to normalize in the upcoming two or three months if refiners maintain the maximum gasoline mode, also if the global economy did not plunge into a double-dip recession.
