Record Refining Runs

3 Aug 2018; 

In their latest weekly petroleum report, the U.S. Energy Information Administration (EIA) noted that U.S. refineries are running at near-record levels.  The four-week average of U.S. gross refinery inputs surpassed 18 million barrels per day (b/d) for the first time since the EIA started publishing this data in 1990.  The last time refinery inputs approached 18 million b/d was in the week of August 25, 2017 (the week before Hurricane Harvey made landfall).  The U.S. economy is currently running on all cylinders and GDP growth reached an annual rate of 4.1% in the second quarter.  This is driving domestic product demand upwards, in particular for gasoline and distillate fuel oil, which (combined) count for almost 75% of refinery output in the United States.  Exports of refined petroleum products are strong as well.  Refined product exports (which includes LPGs and Pet Coke) have more than tripled over the last ten years, from an average of less than 1.8 million b/d in 2008 to 5.5 million b/d in 2018 year-to-date and the upward trend shows no sign of slowing down.  Do these increases in activity have a noticeable impact on product tanker employment and rates? 

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