Crude and Products Price Scenarios to 2025

  • ID: 4457602
  • Report
  • McKinsey Energy Insights
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Trends in Key Price-Setting Mechanisms Over the Last 12 Months Indicate the Decline in Market Conditions Was the Result of Lower Refinery Utilization and a Tighter Resid Market

The report projects oil product prices, margins, and spreads to 2025.

This refined products pricing model uses a time-tested approach of linking physical market fundamentals to the microeconomics-based price-setting mechanisms that explain and predict pricing behavior. These crude and products price scenarios are paramount to understanding actual market behavior and to predicting future market outcomes.

Backed by Fundamentals

  • We generate price scenarios based on oil market fundamentals such as crude supply, product demand, and refinery utilization. Forecasts can be provided based on analyst fundamentals or using your specific assumptions.

Based on Refining Microeconomics

  • Leverage our view on market fundamentals to define where each product falls on a supply or demand curve.

Test Drive Your Own Assumptions

  • This report includes 30 major spot traded product grades in three regional hubs, 11 major regional crude grades on a fob and delivery basis as well as refining margins and spreads.
Note: Product cover images may vary from those shown
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1. Market Overview

Review of changes in market fundamentals (product balances, refinery utilization, and crude and product trade flows) and their resulting impact on which mechanisms have been setting price and margin conditions.

  • How have prices and margins changed monthly over the last several years?
  • What price-setting mechanism behavior explains this?
  • What change in fundamentals drove this behavior?

2. Market Outlook

Presentation of a proprietary outlook for market fundamentals (crude and other feedstock supply, product demand, refinery capacity changes) and the impact they will have on key price-setting mechanisms and resulting prices and margins.

  • How will market fundamentals evolve?
  • How will this affect price-setting mechanisms?
  • What prices and margins will result?

3. Sensitivity Cases

Six market scenarios in addition to our reference case, incorporating sensitivities for all key price-setting mechanisms and the resulting impact on prices and margins.

  • Given uncertainty in fundamentals, what are potential alternative outcomes for price-setting mechanisms?
  • What will be the resulting prices and margins?
  • What would you have to believe for this outcome to occur?
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown