for Refined product exports
If refinery utilization remains near current levels, there is the danger of more inventory increases and downward pressure on product prices.
Exports of refined products and a rebound in gasoline demand have been crucial elements of refiner success as of late.
Market conditions had been mostly kind to U.S. refiners over the past five years, but current oversupply of refined products, excess downstream capacity, and tight spreads between the two major benchmarks have considerably changed the outlook.
While crude and products will see only modest changes from the expansion of the Panama Canal, the effects for LNG and propane will be much greater. The U.S. LNG industry will now have access to a transit route that can accommodate larger tankers at a time the industry is primed to export volumes to Asia.
The refining sector is the one part of the oil & gas industry that is actually making money in the current low price environment. The good times are slowing down, with demand growth weakening and refined product inventories ballooning, but U.S. refiners are still set to have a strong year in 2016
With U.S. demand surging and exports on the rise, this summer has been a good time to be a refiner.