Gasoline production may hit a record high

  • Bloomberg News
  • Monday, April 6, 2015 4:45pm
  • Business

HOUSTON — Refiners are poised to make gasoline at a record pace this year, keeping the biggest U.S. crude glut in more than 80 years from overflowing storage.

They’re enjoying the best margins in two years as they finish seasonal maintenance of their plants before the summer driving season. They’ll increase output to meet consumer demand and they’ve added more than 100,000 barrels a day of capacity since last summer, when they processed the most oil on record.

Booming crude production expanded inventories this year by 86 million barrels to 471 million, the highest level since 1930. Analysts from Bank of America to Goldman Sachs have said storage space may run out. What looks like an oversupply to banks is turning into an all-you-can-eat buffet for those making gasoline and diesel fuel.

Goldman Sachs and Bank of America say the risk of breaching storage capacity has increased, sending prices tumbling. West Texas Intermediate oil, the U.S. benchmark, already has lost more than half its value since June as growing U.S. shale production led to a global oversupply.

Inventories surged as U.S. output rose 71 percent over the past five years as drillers used techniques like horizontal drilling and hydraulic fracturing to tap previously inaccessible oil in shale rock layers.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.