Petroleum Refining in Canada Industry Market Research Report Now Available from IBISWorld

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After weathering through volatile oil prices over the past five years, higher demand for automobiles and renewed trading activity with the United States will return the industry to steady growth. For these reasons, industry research firm IBISWorld has added a report on the Petroleum Refining industry to its growing industry report collection.

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Following a volatile performance, oil prices will rise steadily, leading to stable revenue growth

The Petroleum Refining industry's performance has been volatile in the five years to 2013. According to IBISWorld industry analyst David Yang, “Crude oil prices have experienced significant fluctuations over the period, causing the price of petroleum product prices to follow suit.” In 2009, revenue deteriorated as falling crude oil prices pushed down petroleum product prices. Revenue growth quickly recovered over 2010 and 2011 when crude oil prices surged, but slowed down again in 2012 as crude oil prices came down from their historic highs. In 2013, the world price of crude oil is expected to fall 6.6%, leading to an estimated revenue decline of 2.0%. On average, revenue is expected to marginally decline at an annualized rate of 0.6% to $91.2 billion.

After a dramatic drop during the recession, demand for petroleum products has steadily recovered as economic growth picked up. Much of this growth has come on the back of high demand for new cars, boosting demand for gasoline. Demand for diesel fuel, commonly used by freight trucks, has also grown strongly as the revival in economic activity led to greater demand for trucking and shipping services. “Strengthening exports further facilitated the recovery, though export revenue is expected to fall over 2013 due to stabilizing crude oil prices,” says Yang.

Over the past five years, profitability for the Petroleum Refining industry has been mostly determined by the geographic location of the refinery. Refineries in western Canada have had access to cheaper crude oil, as a lack of pipelines has resulted in a glut of crude oil in the region, as well as in the western United States. On the other hand, refineries in the east have had to purchase crude oil at considerably higher international prices, lowering profit margins. Consequently, Shell Canada shut down its Montreal East, QC, refinery in 2010, while Imperial Oil announced plans to close its Dartmouth, NS, refinery in 2012. Due to these closures, market share concentration has moderately decreased, though the four largest firms will continue to account for the vast majority of industry revenue.

Nonetheless, in the five years to 2018, industry revenue is projected to rise steadily. Crude oil prices are anticipated to steadily increase, fuelling revenue growth. In addition, as the economic recovery accelerates in the United States, the primary trading partner for industry firms, export growth will pick up. However, overall refining capacity is forecast to only marginally increase due to restrictive environmental laws, limiting overall industry growth. For more information, visit IBISWorld’s Petroleum Refining in Canada industry report page.

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IBISWorld industry Report Key Topics

This industry refines crude petroleum through cracking and distillation to produce gasoline, diesel fuels and other fuel oils.

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 and Canadian 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 http://www.ibisworld.ca or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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