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US refining capacity drops 4.5% on weak demand during COVID-19 pandemic

June 28/2021

MOSCOW (MRC) -- US refining capacity last year fell 4.5% to 18.13 million barrels per day (bpd) from a record 18.98 million bpd a year earlier, the US government reported, reflecting weak demand for motor fuels during the COVID-19 pandemic, according to Reuters.

It was the first annual decline since 2018, when capacity fell by 18,530 bpd and the largest since 2012, according to Energy Information Administration (EIA) data. That year capacity shrank 414,192 bpd following the Great Recession.

US refiners last year suffered deep financial losses and closed five facilities as the pandemic slashed fuel sales. Average U.S. gasoline consumption fell 13% last year with gasoline and diesel prices hitting a four-year low, according to government figures.

Five refineries, with a combined capacity of 801,146 bpd, permanently shut following the 1.3 million-bpd drop in gasoline consumption as businesses closed and consumers stayed home. The closings drove capacity down to a level comparable to 2016's 18.3 million bpd.

The nations largest crude oil refiner Marathon Petroleum shut three refineries while energy major Shell and independent refiner HollyFrontier each shut one in 2020.

Marathon converted one refinery to a renewable diesel plant and is converting another to produce renewable diesel. HollyFrontier also plans to convert its idled refinery into a renewable diesel producer. The fire-ravaged Philadelphia Energy Systems refinery was sold last year to a developer who plans to demolish it.

As MRC informed before, this year, the 200,000-bpd Limetree Bay refinery in St. Croix, US Virgin Islands, shut in May under orders from the US Environmental Protection Agency. On Monday, owner Limetree Bay Energy said the plant would not restart. The EIA does not count the Limetree Bay refinery as part of total US refining capacity.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
Author:Margaret Volkova
Tags:crude and gaz condensate, propylene, ethylene, Marathon, Shell, USA.
Category:General News
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