US Refiners Expect Strong Refining Margins to Persist

HF Sinclair COO Timothy Go sees the market structurally short due to a wave to downstream rationalisation in North America and disruptions to supply and trade due to the Russian invasion of Ukraine.

• “As you look forward, it’s hard to see that changing significantly … the structural short is going to continue for quite some time, really until you get into 2024, when you start seeing the Mexico or Nigeria refinery start up," said Timothy Go.
• “We think refining margins will continue to deliver above midcycle returns here for the foreseeable future," he said. "Our refineries are producing as much as they can right now, and still having trouble keeping inventories full."
• Valero Energy COO Lane Riggs suggested very similar expectations saying, “We do believe structurally … you're going to have probably not as much investment in the fossil fuel industry — in particular, refining going forward at the time when everybody is trying to understand exactly how the balances are going to work.”