Houston — Major crude oil refineries in Texas' Baytown, Beaumont-Port Arthur and Corpus Christi areas began restarting operations Feb. 21 and Feb. 22, while the rest of the Houston region's refining complex is taking longer to rebound after more prolonged power outage issues during last week's Texas freeze.
아직 가입하지 않으셨나요?
일일 이메일 알림과 구독자 노트를 받고 이용 경험을 내게 맞게 설정하세요.지금 가입하세요
At least 2.3 million b/d in refining capacity began restart activities this week, including North America's largest refinery, Motiva Enterprise's 607,000 b/d Port Arthur Refinery, which may not be fully operational though until March 11, according to an estimate in a new filing with the Texas Commission on Environmental Quality.
However, more than 2 million b/d in refining output remained down on Feb. 22 without yet restarting, mostly in the Houston area. And some refineries still were only partially operational throughout Texas.
Other refineries beginning to ramp back up include ExxonMobil's 560,500 b/d Baytown Refinery and its 369,024 b/d Beaumont Refinery, as well as a bevy of Corpus Christi refineries operated by Citgo Petroleum, Valero Energy and Flint Hills Resources, according to new company statements and filings.
Citgo "is preparing for startup operations following a shutdown resulting from a severe weather event and freezing temperatures," the company said in a TCEQ filing on Feb. 22, which stated the effort could last through March 4. "Refinery utilities (steam, nitrogen, water) were impacted and are gradually being restored."
Citgo also said its 418,000 b/d refinery in Lake Charles, Louisiana was partially impacted, but is now fully operational again.
However, some other Houston-area refineries are still citing issues with leaks and cracked pipes. Shell's Deer Park Refinery reported a mild benzene leak on Feb. 20, while Marathon Petroleum's Galveston Bay complex reported more emissions issues due to cracked pipes on Feb. 22.
Watching timelines, pricing
Sandy Fielden, director of oil research at Morningstar, said companies still will try to restore their refineries quickly even though demand is down from the freeze, the ongoing coronavirus pandemic, and from seasonally weaker demand in February.
"There's likely to be a lot more demand for diesel than gasoline given construction and restoration activity is truck intense," Fielden said. "Folks may be driving around looking for milk and eggs but they aren't commuting every day, and consumption could be constrained by systemic shortages in the short term. That could result in refiners cranking up diesel output and producing too much gasoline."
The weather's impact on crude oil supplies peaked on Feb. 17 with about 4 million b/d of crude oil production -- more than one-third of total US supplies -- coming offline, according to S&P Global Platts Analytics. However, nearly 5 million b/d in crude refining capacity was knocked out by the winter storm.
And the production is coming back online quicker as well. As temperatures rose over the weekend, 85% of production is estimated to be back already, though lingering impacts from freeze-offs could mean 100,000-200,000 b/d remain offline over the coming weeks as damaged equipment is repaired, Platts Analytics said.
The ICE RBOB crack spread against Brent ended Feb. 22 around $15.90/b, down from $16.42/b Feb. 19.
But pricing still remains bullish from crude oil -- with front-month NYMEX WTI approaching $61/b -- to retail gasoline with the national average for regular, unleaded fuel up to $2.63/gal on Feb. 22, up 10.4 cents in one week and up 24.2 cents in a month, according to GasBuddy.com.
"With the cold weather behind us, price increases show begin to slow later this week or next week and, so long as these refineries get back online in short order, we may see gas prices start to move back down in the next couple of weeks," said Patrick DeHaan, head of petroleum analysis for GasBuddy.
"However, as we near spring weather, we'll likely see another longer-term rise in prices begin as refineries start to transition to summer gasoline, so motorists shouldn't jump for joy just yet," DeHaan added.