EIA Says Refinery Expansion Could Ease Summer Fuel Prices
04.24.2023 By TankTerminals.com - NEWS

April 24, 2023 [LAND LINE] – Fuel prices could see a stark change from last summer, said the latest Energy Information Administration’s weekly petroleum report.


This outlook comes just over one month after ExxonMobil announced capacity expansion at its Beaumont, Texas, refinery.

The Beaumont expansion was the first major refinery expansion since the COVID-19 pandemic, EIA’s outlook noted. By adding 250,000 barrels per day of capacity, ExxonMobil says the total capacity at the Beaumont refinery will be 630,000 barrels per day.

In addition, total crude oil refineries on the U.S. Gulf Coast have increased, according to EIA reports.

“New refinery capacity in the region capitalizes on growing U.S. crude oil production and benefits from existing infrastructure for shipping refined products to the East Coast,” EIA’s weekly petroleum report said. “The region also benefits from export infrastructure to Mexico and other destinations via the availability of coastal tanker loading facilities.”

Fuel prices

AAA reported the highest ever recorded average diesel price of $5.816 per gallon on June 19, 2022.

The most recent diesel reports show 2023 average prices are well below that mark and could very well continue to trend downward.

EIA is forecasting that increased refinery capacity in the Gulf Coast combined with higher gasoline and diesel production should put downward pressure on this summer’s fuel prices.

Higher crude oil prices, increasing consumption and low inventories may counteract increased refinery production.

Even still, utilizing crack spreads (the pricing difference between a barrel of crude oil and the petroleum products refined from it), EIA said the diesel crack spread has decreased from $1.20 per gallon in January to 54 cents per gallon as of April 17.

Additional downward pressure on crack spreads is likely as expansions in the Middle East, Nigeria, India and China come online later this year, said EIA.

Pro Trial: Access 12,600 Tank Terminal and Production Facilities

12,600 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

BASF and Stolt Tankers Introduce the Low-Water Chemical Tanker Stolt Ludwigshafen During Ship Christening Ceremony
05.29.2023 - NEWS
May 29, 2023 [Stolt Neilsen]- On May 26, 2023, the new low-water inland tanker Stolt Ludwigshafen... Read More
Turkey, Iraq Seek to Boost Trade at Summit in Erbil
05.29.2023 - NEWS
May 29, 2023 [Rudaw]- Erbil on Sunday hosted the seventh Turkey-Iraq investment and trade summit,... Read More
Oil Supply won't be Affected by Stricter Price Cap Enforcement, IEA says
05.29.2023 - NEWS
May 29, 2023 [Reuters]-  “It may have some impact but countries once again reiterated that... Read More
Hedge Funds’ Ultra-Bearish Oil Bets Signal US Recession Angst
05.29.2023 - NEWS
May 29, 2023 [The Business Times]- MONEY managers who trade derivatives linked to oil and fuel p... Read More