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REFINERY MARGIN TRACKER: Midwest refining margins rise on increased harvest demand

Highlights

USDA sees corn, soybean crop harvest above average

Refinery outages cut into ULSD, gasoline production

Refining margins across the globe strengthened for the week ended Oct. 1 with those in the US Midwest topping those of other regions as US harvest shifts into high gear and refinery problems impact supply, an analysis by S&P Global Platts showed Oct. 5.

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According to the US Department of Agriculture's Oct. 4 crop progress report, the soybean and corn harvest in many of the Midwest's producing states is above the five-year average for this time of the season, which has created strong seasonal demand for ULSD.

US Midwest coking margins for Western Canadian Select rose to average $16.47/b for the week ended Oct. 1, from the $16.36/b for the week ended Sept. 24, according to S&P Global Platts Analytics margin data.

Strong seasonal demand for ULSD for agricultural use has propelled Chicago ULSD prices to average $2.46/gal so far in Q4, the highest Q4 level since 2010, according to Platts assessments. A spate of refinery outages has reduced production of the fuel.

Most recently, this includes PBF Energy's 172,800 b/d Toledo, Ohio, which lost power earlier in the week, with market sources reporting possible problems at other Midwest plants, including BP's massive 435,000 b/d refinery in Whiting, Indiana.

Refinery outages cut runs, stocks

Midwest ULSD inventories are also just below the five-year average, according to most recent weekly US Energy Information Administration data.

This puts Midwest ULSD inventories at 30.4 million barrels for the week ended Sept. 24, slightly below the five-year average, as regional refinery utilization for the week fell to average 93.2% of capacity for the week, down from the 96% for the week ended Sept. 17.

Lower refinery runs propelled Midwest cracking margins higher as gasoline prices rose. Midwest cracking margins for WTI barrels ex-Cushing averaged $15.33/b for the week ended Oct. 1, up from the $14.69/b for the week ended Sept. 24, as gasoline stocks also fell below the five-year average.

EIA weekly data put total Midwest gasoline stocks at 46.537 million barrels for the week ended Sept. 24, down from 46.933 million barrels the week earlier.

Platts assessed Chicago CBOB at an average price $2.29/gal for the week ended Oct. 1 and has risen to average $2.376/gal thus far over the week ending Oct. 8.

US Atlantic Coast Refining Margin Averages ($/b)

Bonny Light Cracking

Arab Light Cracking

Bakken Crude Cracking

Forties Cracking

Week ending October 01

13.05

12.56

10.43

11.43

Week ending September 24

12.09

11.47

9.63

10.78

Q4 to date

14.98

14.54

12.17

13.29

Q4-20

4.16

3.79

3.60

4.28

Q3-21

13.59

11.76

11.17

12.28

Q2-21

11.70

9.66

10.17

10.58

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 October 01

12.27

13.62

14.19

14.01

Week ending September 24

11.58

13.22

13.90

13.49

Q4 to date

14.30

15.57

16.13

16.04

Q4-20

3.47

6.10

5.53

4.32

Q3-21

12.30

14.56

14.13

14.35

Q2-21

10.15

13.09

11.76

11.49

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 October 01

15.78

15.33

15.40

16.47

Week ending September 24

15.32

14.69

15.09

16.36

Q4 to date

18.11

17.87

17.79

19.09

Q4-20

6.63

4.59

7.68

4.35

Q3-21

16.62

15.28

15.80

17.49

Q2-21

16.68

14.77

14.16

15.84

Source: S&P Global Platts Analytics

US West Coast Refining Margin Averages ($/b)

ANS Cracking

Vasconia Coking

Arab Medium Coking

Maya Coking

Week ending October 01

15.54

21.96

18.37

18.56

Week ending September 24

14.86

21.31

17.53

17.97

Q4 to date

16.44

22.95

19.39

19.51

Q4-20

10.16

11.56

9.67

12.22

Q3-21

17.25

24.83

19.48

20.25

Q2-21

16.88

22.12

18.10

18.88

Source: S&P Global Platts Analytics

Singapore Refining Margin Averages ($/b)

Dubai Cracking

Arab Light Cracking

ESPO Cracking

Arab Light Coking

Week ending October 01

2.80

0.68

2.41

1.11

Week ending September 24

2.11

-0.34

1.69

-0.11

Q1 to date

3.22

2.15

3.55

2.63

Q4-20

-1.07

-0.45

-1.14

-0.57

Q3-21

0.27

-1.61

2.29

-1.17

Q2-21

-1.14

-2.15

0.69

-1.90

Source: S&P Global Platts Analytics

ARA Refining Margin Averages ($/b)

WTI MEH Cracking

Bonny Light Cracking

Arab Light Cracking

Urals Cracking

Week ending October 01

7.21

8.58

5.02

7.84

Week ending September 24

6.41

7.89

4.09

7.10

Q4 to date

8.29

9.62

5.77

8.85

Q4-20

0.91

1.67

0.55

1.08

Q3-21

6.18

7.79

4.19

6.64

Q2-21

4.24

5.37

3.01

4.59

Source: S&P Global Platts Analytics

Italy Refining Margin Averages ($/b)

Urals Cracking

CPC Blend Cracking

Arab Light Cracking

WTI MEH Cracking

Week ending October 01

7.79

8.64

4.08

5.58

Week ending September 24

7.48

7.95

3.46

5.09

Q4 to date

8.53

9.07

4.64

6.27

Q4-20

1.31

2.98

-0.01

0.62

Q3-21

7.26

8.16

3.37

5.05

Q2-21

3.84

5.70

1.31

2.38

Source: S&P Global Platts Analytics