US refiners may maximize distillate output at expense of petchems
US production of aromatics from refineries could get squeezed as refiners seek to maximize distillate production at a time when diesel and jet fuel are earning significant premiums over gasoline. Spreads are approaching records last seen in 2022, when the war started between Russia and Ukraine. After a respite from that earlier surge, spreads have ...
Refineries in the United States may prioritize increasing distillate output, potentially at the cost of producing chemical petrochemicals. This shift is driven by the significant premium earned by diesel and jet fuel over gasoline. Spreads have reached near-record levels not seen since 2022, a period marked by the Russia-Ukraine conflict.
Recent escalations, such as the US-Iran war and drone attacks affecting Ukrainian refineries, have further disrupted fuel markets. Winter demand for heating oil could exacerbate these premiums, incentivizing refineries to optimize distillate yields. Refineries can marginally adjust the middle-distillate yields by modifying the naphtha/distillate swing cut in their crude distillation units.
This adjustment impacts chemical markets since materials within the swing-cut range can be directed towards distillate/kerosene or the refinery's catalytic reformer. Catalytic reformers produce reformate, a crucial gasoline blendstock, as well as aromatics like benzene, toluene, and mixed xylenes. When refiners shift swing cuts to favor distillate production, less material is available for reformer feed, potentially reducing aromatics production.
While these marginal adjustments involve trade-offs, high distillate premiums may justify such economic considerations.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
