CVR - Competitors

CVR Competition

Now Viewing CVR's competition in: Petroleum Refining (primary)

Recent Developments

Experts See Declining Use - Experts at the International Energy Agency (IEA) predict less oil demand than originally forecast for both 2008 and 2009, an indicator of lower demand for refiners as well. IEA notes that the high price of oil and challenging economic conditions in many parts of the world, especially in the US, indicate a slight decrease in demand for oil. Despite revising its forecasts, IEA predicts a slight worldwide demand increase of 1 percent in 2009 compared to 2008.

Diesel Fuel Demand Drives Expansion - The move toward lower emission diesel fuel, called ultra low sulfur diesel (ULSD), is driving a massive expansion of Valero Energy's refinery at Port Arthur, Texas. The expansion will cost Valero $2.4 billion, which the company says is its largest project to date. ULSD demand is anticipated to grow in the US and internationally due to increasingly stringent emissions standards around the globe.

Hurricanes Close Refineries - Hurricane Ike, which struck in September 2008 and damaged some oil and gas platforms in the Gulf of Mexico, caused 14 refineries to close temporarily. However, the US Department of Energy indicates that the refineries survived the storm with relatively little damage. Gulf Coast refineries were closed for the second time in just a few weeks, as Hurricane Gustav had earlier caused 12 temporary closures.

Competitive Landscape

Demand, largely driven by US consumption of gas and diesel fuel, has been relatively flat in recent years. The profitability of refineries depends on efficient operations and the best mixture of products. Although there are significant economies of scale in refinery operations, a small refinery can compete effectively with large ones if it's located in a favorable market area, or if it produces specialty products that are in high demand. The industry is highly automated: average annual revenue per worker is over $3 million.

Full Industry Overview For Petroleum Refining

Petroleum Refining Industry Forecast

from Hoover's/D&B subsidiary First Research

The output of US petroleum refining is forecast to decrease at an annual compounded rate of -1.2 percent between 2008 and 2013.

Petroleum Refining Production Growth Volatile

First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.