US refners seek lower capacity for longer

摘要

US independent refners are deepening their capacity cuts and seeking more sectoral consolidation to match an extended downturn in global fuel demand. A resumption of Covid-19 lockdowns in Europe and fattening growth in US transportation fuel demand has led US refners to cut dividends and operations in order to get through the winter. Executives estimate that roughly half of the 2mn-2.5mn b/d of US refning capacity made redundant in the immediate demand outlook has been idled or is planned to shut. “Whether it is the west coast or whether it is worldwide, the industry is under a lot of stress right now and the way cyclical industries get out of that stress is rationalisation,” Marathon Petroleum chief executive Mike Hennigan says. US capacity on the highest-cost west and east coasts is among the frst to close. PBF Energy’s plan to shut roughly 85,000 b/d of capacity at still-operating Atlantic coast refneries this year brings the volume of US capacity shuttered in 2020 to 660,000 b/d (see table). A further 140,000 b/d will shut over the next three years, as part of planned renewable diesel conversion projects.