The very shifts in regional crude acquisition costs that are helping redraw the U.S. refining map remain subject to change, however. On the Gulf Coast, much of the considerable investments that refiners recently plowed into the sector have been geared less towards expanding nameplate capacity than increasing conversion depth - in other words, letting regional refineries replace light, sweet and light, sour barrels with lower-cost, heavy crudes. Those upgrades, when completed, will back out large volumes of light crude currently supplied regionally or piped north from the Gulf Coast. Following the reversal, and later expansion, of the Seaway pipeline, significant volumes of light crude may end up being shipped south from the Midwest to the Gulf Coast, even as the latter's own demand for light crudes wanes in the wake of local deep-conversion refinery expansions. This decrease in Midwest and Gulf Coast demand for light crudes will occur even as refinery closures curtail the East Coast's own crude demand and refined-product output. The outcome may be a narrowing of the so-called sweet/sour and light/heavy crude price spreads. East Coast refining margins could rise significantly due to the combined effects of lower relative feedstock costs and stronger relative product prices compared with those in markets that currently seem cost-competitive.
Diverging trends in regional crude acquisition costs
- Vance Agribusiness names 2014 40 Under 40 honorees
- 6 questions and answers about rumen development in calves
- Life changes, but fall brings World Dairy Expo
- Last look at New Holland Pavilions before World Dairy Expo
- Dairy calf care: Every delivery is special
- Dairy calf care: When to assist, what to do