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Refinery Problems
Here is a partial list of outages from Energy Assurance Daily that are supporting gasoline prices. You will notice a common thread in the list. Most involve catalytic cracking units (CCU) or fluid catalytic crackers (FFC). Crackers are where most of the gasoline components are first made. Crackers break down or crack large heavy molecules into smaller ones used in gasoline and diesel blends. Without a cracker most gasoline production is lost.
Outages
April 25 Cat Cracker Shut at ExxonMobil’s 348,500 b/d Beaumont Refinery in Texas Gasoline and Distillate Production Loss Estimated at 325,000 b/d (3 days)
April 24 Malfunction Shuts CCU at Sinclair’s 70,300 b/d Tulsa Refinery in Oklahoma (7 days)
April 24 BP’s 420,000 b/d Whiting Refining in Indiana to run at 50 percent of capacity until repairs and turnaround work is Completed (8 weeks)
April 23 Malfunction Shuts FFC Unit at Valero’s 250,000 b/d St. Charles Refinery in Louisiana Gasoline Production Cut by 71 Percent (10-14 days)
April 21 Loss of Steam Shuts CCU at BP’s 160,000 b/d Toledo Refinery in Ohio
April 21 Power Outage Shuts Several Units at Valero’s 170,000 b/d McKee Refinery in Texas
April 20 SRU Problem at ConocoPhillips’ 216,000 B/d Sweeny Refinery in Texas is slowing several units
April 20 Citgo restarts 120,000 b/d crude unit at its Lake Charles Refinery in Louisiana
Source: ENERGY ASSURANCE DAILY
Let's take a look at one of these refineries to get an idea of the impact on the weekly statistics. With only half of the 420,000 b/d Whiting refinery down there is 210,000 b/d of crude oil that is not being refined. Since about half of the crude that is refined ends up as gasoline that means 105,000 b/d of gasoline will not be produced. That is close to 750,000 barrels per week. If everything else stayed the same the weekly statistics would be changed in the following ways: refinery utilization would be 1.2% lower (210,000 b/d divided by capacity of 17.5 million b/d). Crude oil stocks would be 1.4 million barrels higher (210,000 b/d times 7 days). Gasoline stocks as already noted would be almost 750,000 barrels lower. Other products would also have lower inventories.
Not mentioned in the list above is the BP Texas City refinery. It has almost 200,000 b/d of capacity still off line since the fall of 2005. It would double the numbers we have from the Whiting refinery. We could go on but you get the point. Refinery utilization should be well over 90% at this time of year but this week it dropped from 90.4 to 87.8. As you will see in the details below we not only have low refinery production we also have exceptionally low gasoline stocks and it may be into the driving season before they approach normal levels. That means it could be sometime in June or even later before the margins between gasoline and crude return to normal levels.
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Also, it's product supply, principally motor gasoline, not crude supply, that is somewhat tight at the moment.
;^)
OK, but if the only reason the refineries are down is that they are broken or getting maintenance, it is not the same as them being idle because there isn’t anyone who wants the gas. The problem is, any gas that’s pumped out gets used up due to high demand.If the refineries weren’t broken, it seems likely to me that they’d be pumping at full speed too, bringing it back up to 98%.
Thanks for the interesting chart and info.
It's all a coincidence I'm sure.