REFINERY MARGIN TRACKER: Massive storm wreaks havoc as it sweeps across US Atlantic coast

Strong points

Oil imports increase as temperatures drop

Refinery impacts seen from prolonged extreme cold

Storm-related weekend travel bans will hit gasoline demand

Tight supply and growing demand have boosted weekly margins across the globe, with U.S. Atlantic Seaboard margins showing the impact of the massive cold front and storm that swept through the weekend, S&P analysis shows. Global Platts on January 31.

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USAC temperatures have been in and out of noon for the past few weeks, before the blizzard dropped varying amounts of snow along the coast over the weekend, bringing 23 inches of snow to Boston .

Persistent cold weather in USAC has increased demand for oil, with 25-30% of all USAC electricity generated by oil, market sources say, as cold weather has increased demand of natural gas.

With mid-Atlantic and New England distillate inventories hovering just above all-time lows, USAC January fuel oil imports averaged 139,000 bpd, 43,000 bpd /d higher than January 2021 volumes. This is 13,000 bpd higher than December volumes, with most barrels in the mid-Atlantic coming from northwest Europe and those from New England from Canada, according to data from the Kpler data tracking service.

Fuel oil volumes imported into USAC for the week ending Jan. 28 averaged 282,000 bpd, well above the four-week average of 137,000 bpd, according to Kpler data.

The price of NYH No. 6 fuel oil cargoes is averaging $77.31/bbl so far in Q1 2022, compared to $69.57/bbl in Q4 2021, according to S&P Global Platts price assessments .

Refinery impact

USAC refineries also felt the impact of the extreme cold. Sources familiar with the matter said Phillips 66 removed catalytic cracking from 145,000 bpd gasoline producing fluid at its Bayway refinery in Linden, New Jersey, as cold weather shut down the gas compressor. its associated cogeneration facility at the start of January 31.

A spokesperson for Phillips 66 declined to comment, but said no work was planned underway at the plant.

Despite the extreme cold, gasoline demand along USAC rose 9.9% last week as total weekly U.S. gasoline demand rebounded from the eight-month low seen last week. previous week.

According to retail tracking data from GasBuddy, total weekly U.S. gasoline demand rose 6.2% from the previous week and 1.9% above the moving average. over four weeks.

“Weather probably still played a key role in changing gasoline demand. Demand on Saturday was up only 0.1% compared to the previous Saturday,” said Patrick De Haan, head of media at GasBuddy.

While USAC crack spreads increased week over week, they declined at the end of the week due to travel advisories put in place by many Atlantic seaboard states.

USAC Bonnie Light crack spreads, according to margin data from S&P Global Platts Analytics, averaged $11.69/bbl for the week ending Jan. 28.

Data from Platts Analytic showed the Jan. 28 margin fell to $13.88/bbl from $14.27/bbl on Jan. 27 due to expectations of lower gasoline demand from USAC. next week as storm travel advisories put in place prevented drivers from driving on January 29 and 30.

PBF said to restore Paulsboro offline capability

But in the longer term, gasoline demand is expected to increase and to meet that demand, market sources said PBF Energy is preparing to restart the section of the Paulsboro refinery that it shut down at the start of the coronavirus pandemic.

A company spokesman said he was unable to comment on the state of the refinery, particularly ahead of PBF’s fourth quarter earnings call on Feb. 10.

The gasoline producing fluid catalytic cracking unit was one of the units shut down in January 2021, along with the coker, reformer, alkylation unit and the smaller of the two crude units.

US Atlantic Coast Refining Margin Averages ($/bbl)

Source: S&P Global Platts Analytics

US Gulf Coast refining margin averages ($/bbl)

Source: S&P Global Platts Analytics

US Midwest refining margin averages ($/bbl)

Source: S&P Global Platts Analytics

US West Coast Refining Margin Averages ($/bbl)

Source: S&P Global Platts Analytics

Average refining margins in Singapore ($/b)

Source: S&P Global Platts Analytics

Average ARA refining margins ($/b)

Source: S&P Global Platts Analytics

Average refining margins in Italy ($/b)

Source: S&P Global Platts Analytics