Refinery margin tracker: USWC refiners increase crude imports as coking margins strengthen

New York — US coking margins trended stronger last week as diesel demand rose and refinery runs fell, whetting the appetite for increased imports of heavy crudes into coker-heavy coastal refineries, an analysis from S&P Global Platts showed Monday.

US West coking margins outshone those of other regions, with Arab Medium averaging $12.39/b for the week ended January 10, up from the $10.60/b the week earlier, according to margin data from S&P Global Platts Analytics.

Margins for Arab Medium averaged $2.26/b on the US Gulf Coast, down from $3.56/b the week earlier.

Stronger USWC margins were supported by a draw in diesel stocks and fall in production in California, according to California Energy Commission data. On the USGC, product exports were impeded by dense fog and inclement weather, shipping sources said, which stranded barrels and weighed on regional margins.

Total US crude imports rose to 6.73 million b/d for the week ended January 3, according to Energy Information Administration data, with barrels from Iraq, Colombia and Brazil rising on week and Saudi Arabian and Canadian imports softening.

Crude imports are expected to rise again for the week ended January 10 to about 6.9 million b/d, according to estimates by Platts Analytics.

REFINERY SNAGS SUPPORT HIGHER USWC MARGINS

The biggest regional bump in crude imports came on the US West Coast, which imported 1.57 million b/d for the week ended January 3, EIA data showed, to replenish, in part, lower California crude inventories.

USWC crude imports are expected to post another rise after California crude stocks fell to 14.9 million barrels for the week ended January 3.

US Customs data shows crude imports into the Port of Long Beach, which serves Los Angeles-area refiners, rose to about 700,000 b/d for the week ended January 10 from 180,000 b/d the week earlier. About 450,000 b/d of imported crude had an API between 25 and 35.

Refining issues last week pushed Los Angeles CARB ULSD to an average a 17 cent/gal premium to San Francisco CARB ULSD, Platts price assessments showed, the widest spread between the two regions since 2014. Marathon reported flaring at its 363,000 b/d Los Angeles refinery, while PBF and Phillips 66 reported issues at their California refineries in Torrance and Wilmington.

California's distillate inventories fell by about 500,000 b/d to 4.729 million barrels for the week ended January 3, while production dropped to 330,000 b/d from the 397,000 b/d the week earlier, California Energy Commission data showed.

EUROPEAN MARGINS TICK HIGHER

Northwest Europe refinery margins were weaker despite ongoing port strikes in France, countered by a rise in gasoline inventories. French strikes are limiting crude deliveries to some refineries, including Total's 220,000 b/d Donges refinery, which on Monday shut down its crude unit due to lack of crude.

The Urals cracking margin in the oil hub of Amsterdam-Rotterdam-Antwerp averaged $5.82/b for the week ended January 10, compared with $5.97/b the week earlier.

ARA gasoil stocks rose to 19.3 million barrels for the week ended January 3, according to Insights Global data, as warmer-than-normal temperatures capped regional heating demand.

Conversely, the data showed gasoline stocks fell to 8.72 million barrels as trade sources reported strong buying interest from the Persian Gulf, North America and West Africa due to planned work at several refineries in those regions.

ASIAN MARGINS RETREAT FURTHER

The Dubai cracking margin in Singapore slipped to an average of minus $2.31/b for the week ended January 10, down from the minus $2.08/b the week earlier, despite total clean product inventories slipping below the five-year seasonal range.

Margins were weaker on imports of naphtha, reformate and other blendstocks that poured in to Singapore from the Middle East, sources said.

Imports of light distillate stocks rose to 12.062 million barrels in the week ended January 8, according to data from Enterprise Singapore. Gasoline imports were fairly steady at about 2.78 million barrels, data showed.