Developing Refinery Utilization Indices for the Global Crude Oil Refinery Market

Oil physical market players and stakeholders - traders, press and media, hedge funds follow refinery utilization closely to monitor fluctuations in the demand/supply imbalances. Currently, international data on refinery utilization is either irregular, geographically unspecific or not publicly available at low cost. The capstone team capitalized on this opportunity for informed decision making by standardizing and benchmarking refinery utilization rates on EIKON with other external data available for the world.

Refinery indices would be released weekly on Mondays, prior to information releases by other data sources providing a global snapshot of refinery capacities. Third party refinery data available on EIKON is via the Industrial Information Resources (IIR). It is daily data, updated on an intraday basis and widely regarded as the industry standard. The capstone team identified important regional hubs and mapped refinery indices for worldwide oil refineries to maximize the utility of information released. Such an index will be a pioneer in the oil markets’ information industry and would increase the utility of EIKON to a wider audience interested in oil markets.

The capstone team benchmarked EIKON data by comparing it with official statistics released by JODI and other databases. Different statistical metrics were tested to benchmark IIR and JODI monthly data. Gap analyses revealed gaps existing between reported numbers on the EIKON platform and IIR data. In addition to geographical proximity, market relevance, aggregated refinery capacity, and trade flow criteria, an additional parameter of confidence intervals was added. USA and Japanese monthly EIKON reported values were found to be the most reliable.