LONDON: US oil refineries are processing record volumes of crude but stocks of refined fuels remain well- contained thanks to strong exports and demand at home.
US refineries processed 17.5 million barrels per day (bpd) of crude in the week ending on May 26, according to the US Energy Information Administration (EIA).
Throughput was more than 1.2 million bpd higher than at the same point in 2016 and 2.2 million bpd above the 10-year seasonal average. Record refinery runs have helped pull down US crude stocks by 31 million barrels since the end of March, with inventories drawing down much faster and earlier in the year than normal.
But despite fears that record processing would result in a build up of unsold products, stocks of gasoline and diesel have generally moved in line with normal seasonal patterns.
Part of the explanation lies in the strength of exports, mostly to markets in Central America, South America and the Caribbean, where aging and inefficient refineries have struggled to meet growing demand from consumers.
US refineries are increasingly geared toward meeting demand from the rest of the hemisphere rather than just the US.
US refiners and traders exported 640,000 bpd of gasoline in the week ending on May 26 and a near-record 1.25 million bpd of distillate fuel oil. Fuel consumption at home is also now running at record or near-record levels, according to an analysis of EIA data.
Gasoline supplied to domestic customers in the US hit a record 9.8 million bpd last week, an increase of roughly 330,000 bpd compared with the same period in 2016.
Distillate supplied averaged 4.1 million bpd, significantly higher than in 2016, though still below the record set in 2007.
From the end of August 2016, the EIA introduced a new and more accurate methodology for calculating exports and estimating weekly gasoline and diesel consumption.
The new methodology uses real-time information obtained from US Customs to estimate current weekly exports where the prior methodology relied on a two-month lagged model to derive estimated values, which in turn introduced a potential source of errors into estimates for domestic consumption.
So estimates for consumption before and after August 2016 are not strictly comparable but the older data can be corrected in retrospect using reliable monthly export data from the US Census Bureau.
The export-corrected time series show consumption of both gasoline and distillate fuel oil has been running at a high level since March.
The increase in gasoline and distillate demand is consistent with more comprehensive monthly data showing consumption of both rising strongly in March after being relatively weak in January and February.
Strong fuel demand in export markets and at home explains why US refining margins have held up well despite the surge in processing rates.
Refinery margins in most parts of the US have been little changed during the second quarter of 2017 compared with the same period in 2016, despite much higher throughput.
According to the EIA, US refiners have added almost 500,000 bpd of atmospheric crude distillation capacity since the start of 2016.
Building and expanding crude units is expensive so once these units were commissioned there was a strong incentive to use them to start recovering the cost.
US refineries are generally more efficient than their rivals in Europe and certainly more so than refineries in Latin America.
US-based refiners also have lower transportation costs given their proximity to sources of crude from Texas, New Mexico and North Dakota, and being closer to major fuel customers than rival suppliers in Europe and Asia.
US refiners are, therefore, well placed to capture market share from weaker and less flexible rivals in other parts of the Atlantic Basin. With so much fuel entering the supply chain there must be some risk that either the domestic or export markets will become saturated.
But the resilience of refining margins indicates the risk is not thought to be high at the moment and is giving refiners a continued incentive running at record volumes.
• John Kemp is a Reuters market analyst. The views expressed are his own.
US refiners process record volume of crude as demand climbs
US refiners process record volume of crude as demand climbs
Reforms target sustained growth in Saudi real estate sector, says Al-Hogail
RIYADH: The Real Estate Future Forum opened its doors for its first day at the Four Seasons Riyadh, with prominent global and local figures coming together to engage with one of the Kingdom’s most prospering sectors.
With new regulations, laws, and investments underway, 2026 is expected to be a year of momentous progress for the real estate sector in the Kingdom.
The forum opened with a video highlighting the sector’s progress in the Kingdom, during which an emphasis was placed on the forum’s ability to create global reach, representation, as well as agreements worth a cumulative $50 billion
With the Kingdom now opening up real estate ownership to foreigners, this year’s Real Estate Future Forum is placing a great deal of importance on this new milestone and its desired outcomes and impact on the market.
Aside from this year’s forum’s unique discussions surrounding those developments, it will also be the first of its kind to launch the Real Estate Excellence Award and announce its finalist during the three-day summit.
Minister of Municipalities and Housing and Chairman of the Real Estate General Authority Majed Al-Hogail took to stage to address the diverse audience on the real estate market’s achievements thus far and its milestones to come.
Of those important milestones, he underscored “real estate balance” as a key pillar of the sector’s decisions to implement regulatory tools “with the aim of constant growth which can maintain the vitality of this sector.” He pointed to examples of those regulatory measures, such as the White Land Tax.
On 2025’s progress, the minister highlighted the jump in Saudi family home ownership, which went from 47 percent in 2016 to 66 percent in 2025, keeping the Kingdom’s Vision 2030 goal of 70 percent by the end of the decade on track.
He said the opening of the real estate market to foreigners is an indicator of the sector’s maturity under the leadership of Crown Prince Mohammed bin Salman. He said his ministry plans to build over 300,000 housing units in Riyadh over the next three years.
Speaking to Arab News, Al-Hogail elaborated on these achievements, stating: “Today, demand, especially local demand, has grown significantly. The mortgage market has reached record levels, exceeding SR900 billion ($240 billion) in mortgage financing, we are now seeing SRC (Saudi Real Estate Refinance Co.) injecting both local and foreign liquidity on a large scale, reaching more than SR54 billion”
Al-Hogail described Makkah and Madinah as unique and special points in the Kingdom’s real estate market as he spoke of the sector’s attractiveness.
“Today, the Kingdom of Saudi Arabia has become, in international investment indices, one that takes a good share of the Middle East, and based on this, many real estate investment portfolios have begun to come in,” he said.
Al-Ahsa Gov. Prince Saud bin Talal bin Badr Al-Saud told Arab News the Kingdom’s ability to balance both heritage sites with real estate is one of its strengths.
He said: “Actually the real estate market supports the whole infrastructure … the whole ecosystem goes back together in the foundation of the real estate; if we have the right infrastructure we can leverage more on tourism plus we can leverage more on the quality of life … we’re looking at 2030, this is the vision … to have the right infrastructure the time for more investors to come in real estate, entertainment, plus tourism and culture.”
