An Oil Refining Capacity Wave Is Coming

An Oil Refining Capacity Wave Is Coming

“The Americans are coming” could have been the subtitle of the International Energy Agency’s latest outlook for oil markets.

Unveiling it at CERAWeek, an annual industry get-together in Houston organized by IHS Markit, IEA chief Fatih Birol posited on Monday that oil-supply growth from outside of OPEC would drive the market for at least the next three years — with one country in particular looking, er, dominant:

The United States will put its stamp on global oil-market developments in the next five years.

A less-obvious tag line is: “The refineries are coming.”

The IEA’s headline projection for oil-demand growth is an extra 6.9 million barrels a day by 2023. But that obscures a shift in the type of oil being demanded.

Demand for refined products such as gasoline — whereby refineries turn crude oil into a useful fuel or feedstock — is projected to rise by just 4.8 million barrels a day. Much of the gap is taken up by a growing share of natural gas liquids, due largely to a surge in supply from the North American shale boom: Read More

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