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Shale revolution accelerating and affecting all US regions

A new study from Turner, Mason & Company states that, “More than at any time in recent history, developments in the US oil patch, driven by shale exploration via fracturing, are changing the entire fabric of the domestic petroleum business and having an increasingly positive effect on US import/export balances.”

The growth in crude oil supplies from US tight oil areas is faster than projected even one year ago, and these developments are driving refining margins and strategies more than anything else, according the report from Dallas-based TM&C. Crude oil movements by rail are trying to keep up while pipeline projects are being planned or delayed by governmental reviews with new rail and terminal projects being hatched almost every month.

“The new shale revolution is now affecting refineries and eventually prices and margins of petroleum products in all US regions,” noted TM&C President, Mike Leger. “Refiners in virtually all US regions will soon have at least some access to price advantaged North American crudes.”

The TM&C report, titled 2013 Crude & Refined Products Outlook, examines these new developments and others in the major U.S. refining centers as well as those in Europe and Asia in coming to a 20-year forecast of crude oil and refined products margins. It also surveys refining projects around the world and the possibilities of additional shutdowns of existing capacity to evaluate the impacts on supply/demand balances in each region.

“In the midst of slow economic growth and decreasing refined products demand in the US, these developments plus the overall growth in demand worldwide, especially for distillates, is a breath of fresh air for US refiners able to capitalize,” added Leger. “US refiners are still more competitive than those in the rest of the world creating increasing export opportunities, but there will be challenges with these and other changes like those from the Renewable Fuel and CAFÉ standards.”

The report examines the basic drivers of crude oil and petroleum products prices and margins. It provides price forecasts in Excel format covering 16 international marker crudes and the full range of refined products. The 2013 edition is now available and a subscription entitles the subscriber to a Mid-Year Update due in August 2013.

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TM&C provides management and engineering consulting services for the petroleum and petrochemical industries. The firm consists of a staff of chemical engineers and refinery market experts, all of whom have had significant experience with operating companies. Founded in 1971, TM&C has an international scope and serves a wide variety of clients operating in these industries. It also develops and publishes various studies and forecasts of the petroleum business, including subscription products, as well as special studies.

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