US Refiner Outages Tighten Thin Fuel Supply
September 22, 2023
US oil refiners that increased processing this year amid increasing demand for gasoline and diesel are being hit by outages weighing on their ability to rebuild thin fuel stockpiles and helping to drive up fuel prices. A more than 50% increase in mechanical outages in the first nine months this year combined with higher planned maintenance after a long run of operating at near full capacity has led to tightening fuel supplies and rising prices.
Platt reported that Russia is moving forward with the introduction of a ban on exports of diesel and gasoline. The ban, according to a government decree published Thursday, would include finished grade gasoline as well as summer, intermediate and winter diesel grades as well as heaving distillates including gasoil. Russia is doing this in hopes for easing its tight domestic supplies which has run up prices. Many analysts see this ban only lasting for a short time.
Morgan Stanley increased its Brent oil price forecasts, saying the market could remain undersupplied for several quarters especially after Saudi-Russian output cuts, but said prices above $100 per barrel would seem “stretched.”
Goldman Sachs raised its Brent crude 2-month forward price estimates from $93 to 100 per barrel. Goldman Sachs points out that global demand for crude reached a record high of 103.7 million barrels in August.