At least one refining executive says the industry is approaching a “golden age” with “the best … yet to come” in terms of making money, because of a limited amount of oil.
Bill Greehey, head of Valero Energy Corp., the nation’s third-largest U.S. oil refining company: “The future looks even brighter because supplies of oil and gasoline are expected to remain tight,” The Kansas City Star reported.
Refineries Valero recently purchased paid for themselves in two years, Greehey said. He spoke recently at a Las Vegas conference sponsored by the Oil Price Information Service, an industry trade publisher.
While many issues were on the table, the consensus was that a structural shift in the refining business could translate into higher prices through 2006. That’s because supplies are expected to tighten, profit margins are expected to increase and that will boost the bottom line, The Star reported.
According to the U.S. Department of Energy, U.S. refining capacity declined since 1981 from 18.6 million barrels per day to 16.7 million as demand was increasing.