13 Sep 2021 | 15:32 UTC
REFINERY MARGIN TRACKER: US Gulf Coast margins drop as natural gas prices rise
Highlights
Shell declares force majeure on Mars
Henry Hub natural gas prices top $5/MMBtu
Rising natural gas prices are eating into refining margins on the US Gulf Coast, where over 75% of US Gulf of Mexico natural gas remains shut in due to Hurricane Ida, an analysis from S&P Global Platts showed on Sept. 13.
US Gulf Coast cracking margins for WTI MEH dropped to $16.07/b for the week ended Sept. 10, from the $16.97/b for the week ended Sept. 3, according to S&P Global Platts Analytics data as the price of natural gas, used as a power source for many refineries, rose sharply.
According to the US Bureau of Safety and Environment, about 1.685 Bcf/d of US Gulf of Mexico natural gas was still offline as of Sept. 10, more than 10 days after Hurricane Ida made landfall as a Category 4 hurricane near Port Fourchon, Louisiana.
The price of Henry Hub gas averaged $5.04/MMBtu for the week ended Sept. 10, the highest price since Feb. 14, during the big freeze which enveloped Texas, when it reached $4.9850/MMBtu, according to S&P Global Platts price assessments.
"Keep in mind that every $/MMBtu is about a minus 25 cent/b hit to refining EBITDA margins," said Matthew Blair, analyst at Tudor Pickering Holt, in a research note.
Platts Analytics data shows the variable cost component of USGC WTI MEH cracking margins -- which includes fuel costs -- rose to average $2.09/b for the week ended Sept. 10 compared with $1.95/b for the previous week.
Mars force majeure
Due to damage to the Mars oil producing infrastructure, operator Shell declared a force majeure because of Hurricane Ida, particularly on the West Delta-143 platform, as a company spokesperson said it was expected that "numerous contracts will be impacted."
The average weekly price of Mars rose $1.19/b to $69.15/b for the week ended Sept. 10, according to Platts prices assessments, while USGC Mars coking margins dropped to $14.34/b for the week, down from the $16.27/b for the week ended Sept. 3, according to Platts Analytics data.
Cracking margins for US Gulf of Mexico benchmark Light Louisiana Sweet also fell to average $15.18/b for the week ended Sept. 10 from the $16.27/b the previous week.
US Atlantic Coast Refining Margin Averages ($/b)
Bonny Light Cracking
Arab Light Cracking
Bakken Crude Cracking
Forties Cracking
Week ending September 10
15.29
12.05
12.96
14.18
Week ending September 03
15.75
13.62
13.89
14.32
Q3 to date
13.69
11.81
11.32
12.34
Q3-20
3.58
1.76
3.23
3.57
Q2-21
11.70
9.66
10.17
10.58
Q1-21
7.69
6.63
6.13
6.49
Source: S&P Global Platts Analytics
US Gulf Coast Refining Margin Averages ($/b)
Arab Light Cracking
WTI MEH Cracking
LLS Cracking
Mars Coking
Week ending September 10
12.16
16.07
15.18
14.34
Week ending September 03
14.14
16.97
16.27
16.27
Q3 to date
12.47
14.75
14.09
14.52
Q3-20
1.59
5.30
4.37
2.97
Q2-21
10.15
13.09
11.76
11.49
Q1-21
7.74
10.50
9.43
8.70
Source: S&P Global Platts Analytics
US Midwest Refining Margin Averages ($/b)
Bakken Cracking
WTI Cushing Cracking
Syncrude Cracking
WCS ex-Cushing Coking
Week ending September 10
18.23
17.30
17.58
17.71
Week ending September 03
18.06
17.15
17.34
18.33
Q3 to date
16.78
15.26
15.81
17.72
Q3-20
5.48
4.21
5.53
4.27
Q2-21
16.68
14.77
14.16
15.84
Q1-21
10.76
9.32
7.22
9.07
Source: S&P Global Platts Analytics
US West Coast Refining Margin Averages ($/b)
ANS Cracking
Vasconia Coking
Arab Medium Coking
Napo Coking
Week ending September 10
15.80
23.13
16.87
19.64
Week ending September 03
18.47
26.55
20.58
22.55
Q3 to date
18.16
26.07
20.40
21.43
Q3-20
10.16
11.09
7.91
9.99
Q2-21
16.88
22.12
18.10
17.33
Q1-21
13.02
16.61
13.86
12.59
Source: S&P Global Platts Analytics
Singapore Refining Margin Averages ($/b)
Dubai Cracking
Arab Light Cracking
ESPO Cracking
Arab Light Coking
Week ending September 10
1.49
-0.99
3.27
-0.95
Week ending September 03
0.28
-2.08
2.60
-1.89
Q1 to date
-0.25
-1.95
2.32
-1.46
Q3-20
-2.10
-2.51
-1.19
-2.87
Q2-21
-1.14
-2.15
0.69
-1.90
Q1-21
-0.83
-1.02
0.97
-1.03
Source: S&P Global Platts Analytics
ARA Refining Margin Averages ($/b)
WTI MEH Cracking
Bonny Light Cracking
Arab Light Cracking
Urals Cracking
Week ending September 10
7.21
9.10
5.78
6.63
Week ending September 03
7.51
9.27
4.96
7.54
Q3 to date
6.05
7.59
4.05
6.42
Q3-20
0.21
1.57
-0.85
0.77
Q2-21
4.24
5.37
3.01
4.59
Q1-21
2.34
3.75
1.08
3.25
Source: S&P Global Platts Analytics
Italy Refining Margin Averages ($/b)
Urals Cracking
CPC Blend Cracking
Arab Light Cracking
WTI MEH Cracking
Week ending September 10
7.77
9.69
5.63
6.39
Week ending September 03
8.18
9.14
4.18
6.09
Q3 to date
7.10
7.99
3.15
4.96
Q3-20
0.54
2.18
-1.74
-0.24
Q2-21
3.84
5.70
1.31
2.38
Q1-21
3.09
4.39
-0.14
0.84
Source: S&P Global Platts Analytics