United States product markets long-term outlook H2 2020 Report

Commodity Market Report 27 January 2021

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Report summary

Long-term outlook for the fundamentals of the United States oil products market. The second half of 2020 brought profound shifts to US refined product markets. While the demand destruction did not deepen from the lows seen in April, the recovery has been significantly prolonged compared to our H1 2020 outlook. The US supply landscape has permanently changed after a wide swath of announced closure in 2020. The two biggest market-shifting shutdowns were Marathon Martinez (160,000 b/d) in PADD 5 and Shell Convent (250,000 b/d) in PADD 3. The H2 forecast for non-refinery diesel supply now includes our latest views on renewable diesel consumption in North America for the forecast period.

Has the US demand profile been permanently reshaped?
- Gasoline and EVs: PADD 5 leads the energy transition
- Diesel/gasoil: growth despite EV/FCV penetration
- Jet fuel: recovery by mid-2020s, then displacement in 2040-2050 amid carbon abatement
- Fuel oil: Shift to LSFO overcome by gas displacement for marine demand
Investments and Transactions
Will the US refining sector recover the utilisation lost?
Will the wave of renewable diesel projects come online as planned?
In Summary
- Methodology Update