US petroleum, gas and power prices were showing signs of easing Feb. 18 as power was returning to Texas and warmer weather was expected in the coming days
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The Electric Reliability Council of Texas authorized utilities to end rolling blackouts, despite more than 40 GW of generation remaining offline as a result of cold weather impacts to gas supply, generation and transmission.
By the afternoon, under 400,000 customers in Texas remained without power, down from about 2.8 million as of 4 pm CT Feb. 17, according to PowerOutage.us.
The Southwest Power Pool's South Hub on-peak day-ahead locational marginal prices reached $3,821.05/MWh for Feb. 18 delivery as North Hub reached $3,385.08/MWh, both new records.
However, SPP South Hub on-peak day-ahead for Feb. 19 delivery was bid at $500/MWh and offered at $1,200/MWh on the Intercontinental Exchange.
In response, leaders of the US House Energy and Commerce Committee vowed to investigate the outages, although committee Democrats warned against vilifying particular energy sources, with capacity losses from the frigid winter weather spanning all resources.
US Federal Energy Regulatory Commission Chairman Richard Glick said that its joint inquiry with the North American Electric Reliability Corp. would strive "to get to the bottom of what happened and assess how these outages can be prevented the next time extreme weather occurs." Glick allowed that he was "prepared, if necessary, to support the imposition of new mandatory standards to make sure that electric generators and others are better prepared when weather strikes next time. And there will be a next time."
Crude and refined products futures edged lower Feb. 18 as power was returning, even as more Texas refineries were reported to be impacted by the cold weather and outages.
All of Texas' 5.9 million b/d of refinery capacity has felt some impact from the cold, according to filings made with state environmental regulators. Particularly impacted is the 5.1 million b/d of refinery capacity along the US Gulf Coast, but the almost 750,000 b/d of inland refining capacity has also reported operational hiccups from the cold.
The onslaught of a new bout of cold weather combined with restoring power grid reliability means refiners are cautious about committing to a timeline for restart.
Roughly 3.3 million b/d of US crude production was offline Feb. 18, down from a peak of 3.8 million b/d the prior two days, according to S&P Global Platts Analytics.
Platts Analytics expects the bulk of lost output to return through the weekend, with roughly 200,000 b/d offline by Feb. 22.
**NYMEX front-month crude settled at $60.52/b, down 62 cents, and up from $59.47/b Feb. 12.
**The bulk of the price gains have been seen in refined products.
**The front-month ICE ULSD crack against Brent closed around $12.51/b Feb. 18, up from $11.69/b Feb. 12.
**The front-month ICE RBOB crack closed around $15.17/b, up from $13.75/b Feb. 12.
**US Gulf Coast spot ULSD was assessed by S&P Global Platts at NYMEX April ULSD minus 1.50 cents/gal, up from minus 5.40 cents/gal Feb. 12.
**The USGC jet market was assessed at ULSD futures minus 15.70 cents/gal Feb. 18, widening from a 14 cents/gal discount Feb. 16, but in from an 18.25 cents/gal discount Feb. 12.
**Trans-Atlantic clean shipping rates have jumped this week, as higher US Atlantic Coast products prices have widened an import arbitrage.
**Platts assessed the UK-Continent to USAC medium-range clean rate at Worldscale 160 Feb. 18, up from w117.50 Feb. 12.
**At Enable Gas and ONEOK, where cash markets have been the most volatile this week, prices were trading around $56/MMBtu and $14/MMBtu, respectively Feb. 18. ONEOK had settled at over $900/MMBtu on Feb. 16.
**Houston Ship Channel and Katy Hub gas was trading around $44/MMBtu and $63/MMBtu, respectively, down from recent levels ranging from $200/MMBtu to over $350/MMBtu.
**A forecast thaw in the Permian Basin saw prices at Waha drop nearly $56 to just $8.41/MMBtu Feb. 18.
**The Electric Reliability Council of Texas continued to peg locational marginal prices at the systemwide offer cap of $9,000/MWh Feb. 18.
**The Southwest Power Pool's South Hub on-peak day-ahead locational marginal prices reached $3,821.05/MWh for Feb. 18 delivery as North Hub reached $3,385.08/MWh, both new records.
**SPP South Hub on-peak day-ahead for Feb. 19 delivery was bid at $500/MWh and offered at $1,200/MWh on the Intercontinental Exchange.
**SPP South Hub weekend traded at $350/MWh on ICE.
**Extended refinery outages were widening the import arbitrage into the US Atlantic Coast, which relies heavily on refined products from Gulf refineries and waterborne imports.
**Most recently, the Yasa Swan was placed on subjects for an Amsterdam-Rotterdam-Antwerp to US Atlantic Coast shipment, basis 37,000 mt, at w160, followed by the Agioi Fanendes heard on subjects for a Port Jerome-USAC shipment, basis 37,000 mt, at w172.5 on prompt dates.
**Kpler vessel-tracking software shows US gasoline imports rising to 5.69 million barrels the week beginning Feb. 22 and 5.21 million barrels the following week, from just 3.4 million barrels the first week of April. The bulk of those barrels are arriving on the US Atlantic Coast.
**Any extended refinery outages would likely impact refined products exports, as would the closure of export terminals.
**USGC refiners exported 4.24 million b/d of refined products in November, according to the most recent US Energy Information Administration monthly data, primarily to Latin America, with 1.13 million b/d alone going to Mexico.
**At US LNG terminals, feedgas deliveries have rebounded about 3.4 Bcf/d over the past several days amid stabilizing production and falling demand. On Feb.18, deliveries were estimated at 5.6 Bcf/d.
**Prior to this week's storm, feedgas demand had averaged over 10 Bcf/d.
**Texas Governor Greg Abbott ordered all sourced natural gas in Texas be made available to local power generators before leaving the state through Feb. 21.
**It was unclear whether the governor's order had its intended impact, as pipeline exports to Mexico climbed about 1 Bcf/d on the day to 4.9 Bcf/d, with net flows to neighboring regions rising about 50 MMcf/d to just over 200 MMcf/d.
**However, US gas exports to Mexico rebounded Feb. 18 to 4.9 Bcf/d, from 3.9 Bcf/d Feb. 16 and Feb. 17, according to data from Platts Analytics.
**Mexico's CFE used 450 MMcf of LNG it had stored in the ports of Altamira and Manzanillo, and further LNG shipments are expected to arrive at those ports in the coming days.
**The Electric Reliability Council of Texas Feb. 18 authorized utilities to end rolling blackouts, despite more than 40 GW of generation remaining offline.
**Of that 40 GW offline, 23.5 GW is thermal generation and the rest is wind and solar.
**ERCOT anticipated that no more than 6.5 GW of wind and 304 MW of solar would be available at winter peak, in ERCOT's final Seasonal Assessment of Resource Adequacy for winter 2020-21.
**Southwest Power Pool's actual peakload since Feb. 14 has averaged 34% above the five-year average, while forecast peakload through the rest of the week is averaging 35% higher than the five-year average.
**The SPP is no longer under any Energy Emergency Alert, but remains in a period of conservation operations though 10pm CT Feb. 20 due to high load and other severe cold weather implications
**Even as power was returning to Texas, roughly 4.4 million b/d of refining capacity was confirmed down Feb. 18, and another 1.5 million b/d of capacity impacted.
**"We're taking a phased approach to a potential return to safe operations at Deer Park. While no timeline has been assigned for a restart of the facility, our site cogeneration plant continues to contribute to the grid," said Curtis Smith, a spokesman for Shell's Deer Park facility.
**According to Platts Analytics, roughly 3.3 million b/d of US crude production was offline Feb. 18, down from a peak of 3.8 million b/d the prior two days.
**Platts Analytics expects the bulk of lost output to return through the weekend, with roughly 200,000 b/d offline by Feb. 22.
**The Houston Ship Chanel was open to traffic Feb. 18, while the Port of Corpus Christi operations were restricted by fog and a lack of power at most terminals.
**US gas production appeared to stabilize Feb. 18 at 75.4 Bcf/d, up just 500 MMcf/d from its recent low, and remains more than 15 Bcf below its prefreeze-off level, according to Platts Analytics
**Mexico's state utility CFE has fully restored power Feb. 18 to northern states, which suffered blackouts due to a shortage of natural gas from Texas.
**Entergy's 1.1-GW Arkansas Nuclear One-2 nuclear reactor in Russellville returned to 100% capacity around 11 am CT Feb. 17, company spokesman Mike Bowling said after power was reduced to 88% capacity Feb. 16.
**STP Nuclear Operating Co.'s 1,312-MW South Texas Project-1, which automatically shut Feb. 15, connected to the grid late Feb. 17 "and is currently ascending to 100% power," company spokeswoman Vicki Rowland said Feb. 18.