Record Gasoline Output to Curb Biggest U.S. Oil Glut in 85 Years
Refiners are poised to make gasoline at a record pace this year, keeping the biggest U.S. crude glut in more than 80 years from overflowing storage.
They’re enjoying the best margins in two years as they finish seasonal maintenance of their plants before the summer driving season. They’ll increase output to meet consumer demand and they’ve added more than 100,000 barrels a day of capacity since last summer, when they processed the most oil on record.
Booming crude production expanded inventories this year by 86 million barrels to 471 million, the highest level since 1930. Analysts from Bank of America Corp. to Goldman Sachs Group Inc. have said storage space may run out. What looks like an oversupply to banks is turning into an all-you-can-eat buffet for those making gasoline and diesel fuel.
“A lot of the excess crude we’ve been sitting on is going to get chewed up quickly,” Sam Davis, an analyst for energy consulting company Wood Mackenzie Ltd., said in Houston April 2. “We’re going to move from a stock build to a stock draw.”
Goldman Sachs and Bank of America have said storage builds are increasing the risk of breaching storage capacity, sending prices tumbling. West Texas Intermediate oil, the U.S. benchmark, already has lost more than half its value since June as growing U.S. shale production led to a global oversupply. WTI for May delivery added $1.30 to $50.44 a barrel on the New York Mercantile Exchange at 10:02 a.m. local time.
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http://www.bloomberg.com/news/articles/2015-04-05/record-gasoline-output-to-curb-biggest-u-s-oil-glut-in-85-years
