John Kemp, Reuters, discusses the problems refiners have due to unbalanced fuel demand here:
http://www.reuters.com/article/us-usa-gasoline-kemp-idUSKCN0WX1XT
“The nightmare for refiners is when consumption of different fuels and other refined products grows at different rates, leaving them struggling to make enough of some items and too much of others.
The problem at the moment is with surging demand for gasoline in the United States as well as a number of other countries, including India, while demand for distillate and other products is growing far more slowly. To meet gasoline demand from motorists, refiners have to process increased volumes of crude, leaving them with unwanted stocks of hard-to-sell distillates and other products.
U.S. gasoline consumption increased by 240,000 barrels per day last year while consumption of all other refinery products rose by just 50,000 bpd, according to the EIA.”
And, from a days supply perspective:
“In terms of demand, however, gasoline stocks are currently enough to cover 25.8 days worth of consumption at current rates, only slightly higher than the 25.6 days this time last year.
Stockpiles are higher than the long-term average of 24.5 days and towards the top end of the 10-year range of 22.1 to 26.1 days but they still seem reasonable and are moving in line with normal seasonal trends.
Overall, the U.S. gasoline market appears to be broadly balanced, with refinery production in line with elevated consumption. But the rest of the fuels market is far out of balance.
U.S. distillate stocks are currently equivalent to almost 44 days worth of consumption, a record for the time of year, and far above the normal 32 days.
Jet fuel stocks have risen to more than 29 days, well above the long-term average of 26 days, and while still within the 10-year range, the oversupply is climbing rapidly.
Stocks of propane and propylene are at a seasonal record. Stocks of residual fuel oil are down compared with 2015 but still above normal for the time of year.”
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