We’ve spent the last few weeks talking about viruses and OPEC production cuts. There was a lot more drama this week, including troubles in OPEC Paradise, which you can read about in our Week in Review article below. But after so much talk on the topic, today’s main article will not be another article about viruses.
In the northeast, markets are shuddering from a mechanical issue at the large P66 Bayway refinery, which produces 272 kbpd for the Northeast market. After years of refineries going out of business in the area, the Northeast has just 7 refineries remaining, half the number in operations a decade ago. With now another major refinery briefly shut down, expect markets to see an uptick in prices. As we reported in FN360 for Q4, Northeast diesel inventories are already below the 5-yr seasonal range. Another outage will certainly weigh on the market, though so far trading has been slow to reflect the news.
On the West Coast, some oil suppliers are planning to bring renewable diesel to consumers at the pump. Chevron has announced plans to make renewable diesel, a drop-in replacement for diesel fuel, available at certain California retail stations. P66 is also working on delivering renewable diesel to consumers. Visit Mansfield’s biofuel page to learn more about biofuels and how they can fit into your purchasing strategy.
Finally, a new report on vehicles trends shows that there will be another 36 million internal combustion engines (ICE) in the US by 2030. ICEs are traditional fuel-consuming vehicles, and many have said they could be replaced by electric vehicles in the coming decades. This latest report shows that fuel consumption will continue to rise for the foreseeable future. While EVs are a growing trend, they will account for just 8% of light vehicle sales in 2025, doubling that share in 2030. That’s significant but not enough to quell America’s growing appetite for fuels. “Peak ICE”, the highest number of ICE vehicles before they begin falling, will not come until 2032 at the earliest. Just this week, the UK set in place a ban to prevent new gasoline and diesel car sales after 2035.
Oil prices today are down once more following Russia’s balk at cutting production. WTI crude is trading at $50.55, down 40 cents.
Fuel prices are a bit more mixed. Diesel prices are down 1.3 cents, trading at $1.6524. Gasoline prices, on the other hand, are up 1.3 cents to $1.5114.