Evidence to Support Being at
Refinery Conversion Limits?
complex refiners increase light crude to maximize
•Did they experience a residual fuelyield penalty?
•Did world residual yields increase?
•Signs of a flood of residual supply?
SSome detailed data are available for U.S.
refineries that helps provide insights into the affects of conversion
capacity, and some helpful world data is also available.
SFor the U.S., we can explore conversion
capacity use, and what various U.S. refiners did, both in terms of crude oil
mix and impact on residual fuel yields.The theory would imply that such refiners would want to lighten
their crude mix, and if they moved to a heavier crude oil mix, they would
have suffered an increase in residual fuel yields as well as a potential
decline in light product yields.
SBut U.S. refiners may not represent the world
situation, since U.S. refineries are the most complex in the world.Worldwide, if an increase in heavy crude
oil supply had a major impact on crude oil price differences due to refinery
conversion capacity constraints, we would expect to see increasing residual
fuel yields and perhaps additional evidence of an oversupply in residual fuel
oil through stock increases.