Refining and Oil Export Slowdowns Among Top Issues

A re-balancing of the United States’ crude oil trade position, coupled with the apparent need for some domestic refiners to idle their facilities, captured the attention of Rigzone’s downstream readers over the past week. Keep reading to find out more about these and other top issues.

US Will Return to Being Net Importer of Oil

Given the dramatic scaling back of output by U.S. oil producers and fewer barrels of crude available to export, the U.S. Energy Information Administration (EIA) this week predicted the United States will return to its former net oil importer status in the third quarter of this year and in most months of 2021. Moreover, EIA foresees the U.S. taking the net petroleum products importer mantle during the same period. The agency also expects net petroleum product exports to hit a low point during the third quarter of 2020 amid a sharp drop in domestic refinery runs.

Some US Oil Refineries May Be About to Shut

Reducing utilization rates may be a sufficient approach for addressing lower fuels demand for some refineries, but others may require the more drastic step of shutting down. Citing an unnamed source, this Bloomberg article reports that Marathon Petroleum Corp. (MPC) might shut down its refinery in Gallup, N.M., next week – the first U.S. facility to take that step. Bloomberg pointed out that Gallup likely would not be the only refinery to idle as cutting run rates while fuels accumulate in their storage tanks.

Oil Leaps on Potential Global Output Cuts

News reports in recent weeks have included considerable speculation about efforts to whittle down volumes in the physical crude oil market. A major focus of that speculation has been whether major oil-producing countries, most notably Russia and Saudi Arabia, will agree to implement output curbs. This Bloomberg article from last Friday points out that expectations of a Saudi-Russian deal have had a bullish effect on oil prices.

Who Is In and Out of OPEC++ Output Deal?

Another article popular with Rigzone’s downstream readers – again concerning speculation about oil production cuts from major producing countries – is this Bloomberg article from Wednesday. Here the news service outlines recent monthly crude output levels among OPEC and non-OPEC countries, highlighting the array of stances leaders in each country have taken on the matter of limiting the volume of the market.

To contact the author, email mveazey@rigzone.com.