The U.S. market for distillates has been crazy the past few months — especially in PADD 1 — and given all that’s going on, it’s likely to stay that way for months to come. Inventories of ultra-low-sulfur diesel, heating oil and other distillates are at their lowest levels for this time of year since before the EIA started tracking them 40 years ago and diesel prices are in the stratosphere, all despite diesel crack spreads being in record-high territory — a strong incentive for refineries to churn out more distillate. In the encore edition of today’s RBN blog, we discuss the many factors affecting distillate supply, demand, inventories and prices and take a look ahead at where the market may be headed next.
In observance of the Thanksgiving holiday weekend, we’ve given our writers a break and are revisiting — and updating — a recently published blog on the U.S. distillates market. If you didn’t read it then, this is your opportunity to see what you missed and catch up on recent developments! Happy Black Friday!
It may be true (technically speaking) that everything that comes out of a refinery is a distillate — after all, the first step in refining (after removing salt from crude oil) is boiling the oil and running it through an atmospheric distillation unit to separate crude into diesel oil, kerosene, heavy naphtha, light naphtha and other distilled products. But when we talk about distillates, we’re really talking about “middle distillates” — so-named because they condensate in the middle of the fractional distillation tank. These would include diesel and heating oil and usually jet fuel/kerosene, while vacuum gasoil (VGO) is not included. (The terminology here can get a bit tricky as our friends outside the U.S. typically use the word “gasoil” to refer to middle distillates generally, while Americans often use the word “gasoil” to refer to VGO specifically.) Middle distillates typically account for 25% to 50% of a refinery’s yield, depending on, among other things, the facility’s equipment and the qualities of the crude slate used. Refiners can tweak their operations and their crude slates to ramp up (or down) how much middle distillate they produce.
The Future of Fuels bi-annual report by RBN's Refined Fuels Analytics provides an in-depth analysis of the U.S. and global refinery industries, focusing on crude oil and fuel market dynamics, supply and demand, alternative fuels, refinery capacities, and price forecasts to help stakeholders navigate the evolving energy landscape.
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About the song
“Why” was written by Annie Lennox and appears as the first song on Annie Lennox’s debut solo album, Diva. Released as the first single from the LP in March 1992, it went to #6 on the Billboard Adult Contemporary chart and #34 on the Billboard Hot 100 Singles chart. Lennox sings “these are the dreams I'll dream instead” in the soulful ballad about love lost and redemption. British director Sophie Muller directed the video for “Why,” which won an MTV Video Music Award in 1992. Personnel on the record were: Annie Lennox (vocals, keyboards); Stephen Lipson, Peter-John Vettese and Marius de Vries (keyboards, programming),; Ed Shearmur (piano); Doug Wimbish (bass); Kenji Suzuki and Stephen Lipson (guitars); Keith LeBlanc (drums); Steve Jansen (drum programming); Paul Moore (trumpet); and Gavyn Wright (violin).
Diva was recorded in 1991-92 at Mayfair and The Church studios in London with Stephen Lipson producing. Released in April 1992, the album went to #23 on the Billboard 200 Albums chart and has been certified 2x Platinum by the Recording Industry Association of America. It won the Brit Award for Album of the Year in 1993. Five singles were released from the LP.
Annie Lennox is a Scottish singer, songwriter and philanthropist. After attending the Royal Academy of Music in London, she joined Dragon’s Playground as a flautist in 1976. From 1977 to 1980 she was the lead singer of The Tourists, a band that included Dave Stewart. With Stewart, Lennox formed the synth-pop duo Eurythmics in 1981, which resulted in Lennox’s biggest success. She started her solo career in 1992. She and Stewart would revive Eurythmics for an album, Peace, and tour in 1999. After that tour, Lennox returned to her solo career. With The Tourists, she released three studio albums, two compilation albums and six singles. With Eurythmics, she released eight studio albums, one live album, one soundtrack album, two compilation albums, one EP and 33 singles. As a solo artist, Lennox has released six studio albums, one compilation album and 23 singles. She has won one ASCAP Award, one Academy Award, one Billboard Music Award, eight Brit Awards, one Golden Globe Award, four Grammy Awards, one MTV Video Music Award, and four Ivor Novello Awards. Lennox has been awarded an OBE and a Billboard Century Award and is a member of the Rock and Roll Hall of Fame and Songwriters Hall of Fame. She continues to record and do philanthropic work.
Comments
You continue to mention a Jones Act waiver as a possible option to help alleviate pad 1 tightness, but then offer no analysis or opinion as to the effectiveness of this. It would be very informative to have this.