API says US refineries running at capacity

The American Petroleum Institute said Monday that US refineries are running flat out to ensure that consumers have a readily available heating fuel supply this winter. It said while the Clinton administration's release of crude from the Strategic Petroleum Reserve may reduce crude and product prices somewhat, it will not necessarily add to heating oil production because refiners are operating at near capacity, and their ability to process additional crude is limited.


WASHINGTON, DC�The American Petroleum Institute said Monday that US refineries are running flat out to ensure that consumers have a readily available heating fuel supply this winter.

John Felmy, API's policy analysis and statistics director, said while the Clinton administration's release of crude from the Strategic Petroleum Reserve (SPR) may reduce crude and product prices somewhat, it will not necessarily translate to increased production of heating oil. He explained that with the nation's refineries running at near capacity, their ability to process additional crude is limited.

Felmy said, "There is a limit to how hard refineries can run, consistent with providing for the safety of refinery workers. Companies must soon 'turnaround' their refineries to make more heating oil this fall, and be prepared to meet potential increases in demand. During a turnaround, like the one traditionally scheduled in the fall, planned vital inspection and maintenance is performed to ensure safe and efficient operations."

He said US refineries, as of a week ago, were operating at 95% of their capacity, which is higher than last year and well above historic levels.

"It may be possible to push production higher for very brief periods, but the decision to do so must be made by individual companies, which will not compromise the safety of workers," said Felmy.

He said despite concern about low heating oil inventories for this time of year, "most heating oil supplied during the heating oil season�in the range of 90%�comes directly from refinery production to users, by-passing the inventory system."

Felmy said record amounts of gasoline and distillate fuel have been produced this year. Since April, building of heating oil inventories has been substantial, but stocks started at lower levels and remain at historical lows.

He said stock building was restrained by the gasoline supply problems in the Midwest earlier in the year, when refiners focused on producing that product.

He also said strong current demand for distillates has affected the volumes available for storage.

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