REFINERY MARGIN TRACKER: USGC refinery margins gain despite higher crude prices

US refinery margins trended higher for the week ended Dec. 10, as crude prices rose on increased demand upon completion of planned maintenance and product prices kept pace with growing demand, an analysis by S&P Global Platts showed Dec. 13.

Globally, refinery downtime is tapering off to 9.8 million b/d in December from the 11.5 million in November, S&P Global Platts Analytics data showed, with the US accounting for 3.05 million b/d offline in November.

Platts Analytics notes US refinery runs have been creeping higher as refineries return from planned and unplanned work. In December, US crude inputs are expected average 16 million b/d, up from the 15.6 million b/d four-week average on Dec. 3, as reported by the most recent Energy Information Administration data.

On the US Gulf Coast, the lingering impacts of Hurricane Ida are dissipating as Shell has fully restarted its 215,000 b/d Norco, Louisiana, plant after storm repair. And Phillips 66 decided against repairing its 255,600 b/d Alliance refinery in Belle Chasse, Louisiana, damaged by Ida and opted instead to make it into a terminal.

Just over the border in Port Arthur, Texas, Motiva recently returned to service a crude unit at its 607,000 b/d refinery but reported to regulators weekend power outage shutdown some process units, the impact of which is unclear on refinery operations and output.

US Gulf Coast margins rise despite higher crude prices

However, the increase in US crude runs has helped – to some degree -- temper gasoline prices. According to Patrick De Haan of Gas Buddy, which tracks gasoline prices across the US, the national price of gasoline is now 12 cents/gal below its 2021 peak.

On the US Gulf Coast, the CBOB differential was heard last done on Dec. 13 at NYMEX January RBOB futures minus 7.75 cents/gal, 75 points below the Dec. 10 close of $2.067/gal, according to Platts assessments. However, so far in Q4 the average USGC CBOB price is averaging $2.245/gal, the highest quarterly level since 2013.

USGC cracking margins for WTI MEH averaged $13.81/b for the week ended Dec. 10, up from the $12.82/b for the week earlier, Platts Analytics margins showed, despite a rise in WTI-MEH to average $72.19/b for the week ended Dec. 10, up from the $68.89/b for the week earlier.

On the demand side, initial assessments of the potential of the omicron variant of the coronavirus have shown that disruptions to product demand are likely to be addressed by existing vaccines, according to S&P Global Platts Analytics. Platts Analytics pegs global demand increasing to 102.6 million b/d in Q4, from the 100 million b/d in Q3.