U.S. refinery utilization rates will stay slightly above the 90% mark in 2023 through 2024, according to the Energy Information Administration (EIA).
U.S. utilization rates are forecasted to average 90.8% in 2023 and 90.3% in 2024, the U.S.-based agency said Feb. 13 in a statement on its website. Utilization rates exceeded 91% in 2022, it said.
The agency said the U.S. was returning to more typical refinery utilization rates after seeing two years of low rates in 2020 and 2021.
The wavering utilization rates in the U.S. come amid an international backdrop of a continuing Russia-Ukraine conflict, which officially reached a one-year mark this February, a global economic slowdown prompted in great part by reduced energy flows from sanctioned Russia, and China’s economy re-opening after enforcing strict COVID-19 lockdowns.
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“In 2020, average refinery utilization dropped to 78.8%, the lowest annual rate since we began collecting this data in 1997, but by 2022, utilization rates averaged closer to pre-pandemic levels at more than 91%,” the EIA said. “On an annual average basis, fleet-wide refinery utilization rarely climbs much higher than 95% because of maintenance periods and seasonal periods of less demand.”
The EIA forecasts low utilization rates in the spring will limit production ahead of summer, traditionally a high-driving season across the U.S. amid grade school and university vacations, encouraging refineries to keep up high utilization rates when not undergoing maintenance activities.
The EIA forecasts gasoline and diesel prices to be lower in 2023 compared to 2022, albeit higher compared to pre-pandemic levels, and especially during the spring maintenance period.
Global refinery throughputs down
Globally, refinery throughputs fell 730,000 bbl/d in January, with U.S. activity still recovering from outages that occurred during the Arctic freeze, the Paris-based International Energy Agency (IEA) said in the February edition of its Oil Market Report.
Scheduled maintenance this month will drive global throughputs lower, the IEA warned.
“Despite mild weather in Europe and a seasonal slowdown in road demand, product cracks rallied on supply concerns in the U.S. and ahead of the EU embargo on Russian products coming into force,” the French agency said.
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