|SWhat can we learn from U.S. complex
refiners? Did they try to increase
light crude oils to maximize light product production? Did they seem constrained in their
heavy-sour crude use?
|SThis chart explores one company’s crude oil
shifts in 2004. It illustrates the
dynamics through 2004, showing how the system shifted to using heavier
feedstocks as the incentive improved (i.e., the light-heavy price
differential increased). The data
here are import volumes for one company that uses over 600 thousand barrels
per day of crude oil in its refineries, each of which uses a wide range of
|SAs crude prices increased, and as the prices
for light sweet crude oil increased faster than heavier crude oils, this
company shifted to running more of the heavier crude oils.
|SIn this case, the heavy sour crude oil
refineries increased their use of heavy sour as well as medium sour, while
backing down on medium and heavy sweet crude oils. While this company’s refineries may have
produced more residual fuel oil as a result, that loss in product value was
apparently less than the savings on crude oil feedstock costs.
|SIn summary, this chart illustrates that:
|–The decision to use heavy sour crude oil is
complex, with many crude-mix options
available for optimization.
|–This company was able to use more heavy
sour crude oil, implying the conversion capacity “constraint” was not
necessarily getting in the way.
|–The increases in heavy sour crude oil use
followed increases in economic incentives to use more as the light-heavy
price differential grew in the latter part of 2004.
|SThe next few slides will explore U.S. refinery
behavior further in order to see if any effects of conversion capacity
limitations can be detected.