Plans for refinery repairs could severely reduce U.S. fuel production

U.S. refineries are planning to make overhauls twice as many as usual in the spring. The pandemic and record high refining margins in 2022 were the reasons for delaying repairs.

On February 5, the European Union's ban on imports of Russian petroleum products will go into effect. Demand will increase and fuel supplies may be reduced due to scheduled repairs. As a result, the need for fuel from the U.S. will increase.

15 refineries in the U.S. are planning to have maintenance work done by May. The duration of the maintenance will take from 2 to 11 weeks. IIR Energy data shows that by the middle of February, U.S. refineries will stop producing about 1.4 million barrels of fuel per day, which is double the 5-year average.

John Auers, an analyst from Refined Fuels Analytics, said that refining margins were high in 2022 and refineries didn't want to close, but they need to be serviced.

In 2022, U.S. gasoline inventories were 240.7 million barrels and now they are 226.8 million barrels. Before the winter storm of the first half of December, refinery capacity was 8% higher than it is now.