Refinery margin tracker: USGC, USAC cracking margins supported by refinery outages, gasoline spec change

New York — Cracking margins were supported by a spate of unplanned refinery outages on the US Gulf and the US Atlantic Coast that took offline several key gasoline making units, an analysis by S&P Global showed Monday.

However, higher gasoline prices were overshadowed by higher crude prices, which caused US margins to trend lower last week. US planned seasonal maintenance is ending, increasing the pull on crude by about 600,000 b/d for the week and raising prices.

The USGC cracking margin for WTI MEH averaged $9.74/b for the week ended February 21, compared with the $9.87/b the week earlier. The crude's outright price assessed by Platts rose about $3/b during the same time period to average $56.45/b.

Unplanned USGC outages include the gasoline-making FCCU at LyondellBasell's 263,776 b/d Houston refinery, taken offline by a fire last weekend. A fire was also reported at Citgo's 157,500 b/d refinery in Corpus Christi, Texas, on Monday, but the FCCU was already down for planned work.

And problems continue to plague the restart of a FCCU at ExxonMobil's Baton Rouge, Louisiana, plant, which was hit by a fire February 12, according to market sources.

GASOLINE PRICES RISE ON OUTAGE, SPEC CHANGES

Prompt pipeline USGC 87 unleaded gasoline prices averaged $1.64/gal for the week ended February 21, up from $1.51/gal the week earlier, Platts price assessments showed.

Waterborne USGC premium gasoline prices also jumped, averaging $1.82/gal for the week ended February 21, compared with the $1.70/gal the previous week, after news of an unplanned outage of the reformer at Shell's 211,270 b/d Convent, Louisiana, plant surfaced.

The 46,000 b/d unit outage cut production of reformate, which is used to increase octane in gasoline. Reformate and other octane enhancers are especially in demand ahead of the seasonal switch towards summer grade-gasoline, which needs more octane to meet the lower RVP.

This combined with the month-long unplanned outage of the 145,000 b/d FCCU at Phillips 66's 258,000 b/d Bayway refinery in New Jersey pulled more gasoline than usual up the Colonial Pipeline into New York Harbor last week in the last shipping cycle for 13.5 RVP gasoline. RVP will drop to 11.5 with the next cycle.

USAC cracking margins were mostly higher on the outage of the Bayway FCCU. The Bonny Light Cracking margin averaged $4.94/b for the week ended February 24, compared with the $4.83/b the week earlier.

This will be the first summer without the 335,000 b/d Philadelphia Energy Solutions plant, which was permanently shuttered last year, cutting about 165,000 b/d of gasoline production. However, due back online sometime in the first half of 2020 is the former Hovensa refinery in the US Virgin Islands.