Petroleum Refining in the US Industry Market Research Report from IBISWorld Has Been Updated

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This industry is anticipated to expand steadily during the next five years as fuel prices rise and consumption increases. For this reason, industry research firm IBISWorld has updated a report on the Petroleum Refining industry in its growing industry report collection.

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The industry is expected to expand as fuel prices and consumption increase

The Petroleum Refining industry has slowed over the past five years. Initially, rising crude oil prices powered revenue growth as refiners passed costs down the distribution line. Firming global growth and ongoing tensions in the Middle East have pushed up the price of oil from its recessionary lows. Robust demand from emerging economies, which require more energy to build up infrastructure, has also supported crude oil exports. Furthermore, low domestic crude oil prices, as compared to international crude oil, bolstered the competitiveness of US petroleum exports. Consequently, in 2011, the United States became a net exporter of refined petroleum products for the first time in many decades, and this continued in 2012. However, in 2013, crude oil prices are expected to fall due to slowing international demand and steady production growth. According to the Energy Information Administration, petroleum product prices are also estimated to decline during the year. As a result, industry revenue is expected to fall in 2013, leading to an annualized decline from 2008 to 2013.

According to IBISWorld Industry Analyst David Yang, “Weakened demand during the recession made it difficult for operators to pass down crude oil costs to customers, which hurt industry profitability.” Profit is anticipated to marginally decline in the five years to 2013. Furthermore, domestic crude oil prices have risen and converged with international prices, causing exports to slow as prices for domestic petroleum rose. On the other hand, while industry revenue has contracted over the past five years, this decline is mostly due to extremely poor revenue performance in 2009, as a result of the recession. Revenue is expected to decline in 2013 but has otherwise been recovering strongly since 2010.

The Petroleum Refining industry has a moderate level of market share concentration, with the four largest companies (including ExxonMobil Corporation, Valero Energy Corporation, Phillips 66 Company and Chevron Corporation) accounting for a little more than half of industry revenue in 2013 (see IBISWorld report 32411 for major player market shares). Due to the high capital costs required to maintain refining facilities, large companies dominate the industry. In the past five years, operators divested assets to pad profit margins during the recession, causing market share concentration to fall during the period. This downward trend continued as Brent crude oil prices soared, limiting the profitability of coastal refineries and encouraging some to exit the industry.

“This industry is anticipated to expand steadily during the next five years as fuel prices rise and consumption increases,” says Yang. Stronger global growth will boost demand for petroleum products, making it easier for operators to pass down costs. Capacity upgrades will lead the way as industry players invest in infrastructure that can handle more crude oil. However, environmental regulations stipulating the inclusion of renewable fuels will pose a challenge to operators. Growth in petroleum consumption is anticipated to slow as consumers increasingly adopt fuel-efficient technology. Nonetheless, revenue is forecast to rise in the five years to 2018.

For more information, visit IBISWorld’s Petroleum Refining in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in the Petroleum Refining industry refine crude oil into petroleum products. Petroleum refining involves one or more of the following activities: fractionation, straight distillation of crude oil and cracking. This industry does not include companies that extract crude oil or retail gasoline.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
IBISWorld Inc.
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