refinery yields

It took a while, but domestic air travel is finally returning to pre-pandemic levels and international travel to and from the U.S. is showing signs of recovering too. As a result, U.S. production of jet fuel has been rising steadily in recent months and, since most jet fuel needs to be transported long distances from refineries to airports, so have flows of jet fuel on U.S. refined products pipelines. All of that is good news, but as pipeline flows rise, so may the stresses on some elements of the U.S. refined products/jet fuel distribution network, including pipelines, storage facilities and “last mile” jet fuel delivery trucks. In today’s RBN blog, we continue our look at jet fuel, this time with a look at the extensive web of U.S. refined products pipelines.

The jet fuel market has been on a wild ride the past two-plus years. First, demand for the refined product took an unprecedented, COVID-induced nosedive in February and March 2020. By May 2020, Gulf Coast prices for jet fuel had plummeted to less than 50 cents/gal (from just under $2 at the start of that year) and refiners had slashed production to 505 Mb/d (from just under 1.9 MMb/d). It was a tough few months — the recovery from the market’s bottom was neither quick nor consistent. Domestic air travel is finally back, but with international travel slower to rebound, total jet fuel supply and demand are still off of their pre-pandemic levels. Jet fuel prices are taking off, though, last week hitting their highest mark since July 2008. In today’s RBN blog, we discuss the jet fuel market: how it’s rebounding, how it works and how it’s changing.

Did you miss our School of Energy a few weeks back in Houston? Not a problem! The entire School of Energy conference is now available online in streaming video format. The conference video, presentation slides and spreadsheet models are available for purchase as individual Modules or as a full conference package. It’s the next best thing to being there!  School of Energy is unlike other natural gas, NGL or crude oil conferences.  It combines all three!  And the curriculum includes a comprehensive analysis of current energy markets and in-depth instruction on how to use RBN spreadsheet models covering everything from production economics to gas processing.  We walk through key developments for each of the three hydrocarbons including the increasingly important links between them.  Fair warning – today’s blog is a blatant advertorial. 

Refinery yields are an important measure of refinery performance indicating the outputs that running a particular crude through a refinery configuration will produce. When these outputs are matched against refined product prices, the relative financial performance of different refinery configurations in different locations can be compared. Refinery yields are also important inputs to the optimization calculations that refiners use to determine the best mix of crudes to process. Today we review how refinery yields are determined and the part they play in refinery optimization.