U.S. Refiners Heating Up
Taking advantage of faltering crude and historically rich cracks but producing into uncertain demand.
Mobius Intel Brief:
U.S. refiners’ net crude inputs expanded to historically elevated levels last week, led by Midwest (PADD 2) net inputs that gained to the 10-YR 99.6th percentile.
Product demand, meanwhile, softened week-on-week. Distillate supplied (a proxy for demand) fell to 3.37 million bpd (10-YR 8th percentile).
Historically rich cracks and four-month-low crude prices are incentives for more refined product output. Still, producing into faltering demand could quickly push products into oversupplied territory.
U.S. Refiners Heating Up
According to this week’s EIA data, U.S. refinery utilization gained 1.1 points to 95.4%, a rapid shift from a 2024 low of 80.6% during February’s historic unplanned outages. This week’s 17.14 million bpd of crude runs was the highest figure since December 2019 (10-YR 88th percentile).
Notably, PADD 2 refinery utilization gained to 99.9%, followed closely by PADD 3 utilization at 96.3%.
Refiners’ increased crude runs reflect historically rich crack spreads and four-month-low oil prices.
Midwest (PADD 2) refiner net crude inputs gained 90 kbpd week-on-week to 4.23 million bpd (10-YR 99.6th percentile).
Gulf Coast refiner net crude inputs gained 23 kbpd to 9.276 million bpd in the week ending May 31, precisely 1.75 million bpd higher than their 2024 lows of 7.526 million bpd in the first week of February.
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