The oversupply of gasoline in the United States may become a new threat for the oil market. Due to the decline in gasoline prices and weak demand for it, refiners in the region began to cut production. In turn, this reduces oil consumption and cause loses for oil producers, which extract oil mainly in shale deposits, writes The Wall Street Journal.
In particular, the company – CVR Refining LP has reduced gasoline production at its plant in Oklahoma, the potential capacity of which is 70 000 barrels per day, by 10 000 barrels per day. The refinery in Ohio, owned by PBF Energy, as of February 11 produced 150 000 barrels per day, with a maximum capacity of 170 000 barrels per day.
"It makes no sense to continue refining, if the company cannot make money on it," - said the head of the CVR Refining Jack Lipinski.
According to the US Department of Energy, refinery capacity utilization in the Midwest last week amounted to 92.9% against 98.2% a month earlier. The refineries will soon be closed for seasonal technical work, and the figures could fall further.
The Midwest refinery, which covers the territory from North Dakota to Ohio and from Oklahoma to Tennessee, is accounting for about a quarter of refining capacity in the United States. At the same time, in contrast to the states near the Gulf of Mexico, mining companies in the region are not possible to send the excess fuel for storage in oil tankers, or export it to foreign countries.
On Thursday, during US trading, oil prices rose above $ 32 a barrel.
As of 14:40 GMT, on the New York Mercantile Exchange, WTI crude oil for April delivery, lost 3 cents, or 0.09%, to $ 32.12 for a barrel.
A day earlier, crude oil futures rebounded after the collapse of more than 2% to close up 28 cents, or 0.88%, after the publication of weekly data on stocks, indicating a high demand for gasoline and distillates, but also showing that US crude stocks rose to record highs, increasing concerns about excess global reserves.
On London's ICE Futures Exchange, Brent crude oil for April delivery lost 8 cents, or 0.23%, to trade at $ 34.33 a barrel as the hope for a collective production cuts continue to support prices.