Diesel supply concerns have begun to emerge in West Texas and New Mexico. Markets experiencing tightness include Odessa, El Paso, Abilene, Amarillo, Lubbock, and Albuquerque.
Refinery turnarounds earlier this month led to tightness in the region, cutting off some rack supplies. Many refineries delayed maintenance during the Hurricanes in September, leading to more turnarounds occurring at the same time. On top of the refinery concerns, the Explorer Pipeline experienced some outages in early-November that caused shipping cycles to be cancelled, causing shortages.
Mixed with limited supplies, exports have risen significantly out of Texas, causing demand to outstrip supply in the region. U.S. exports of diesel fuel reached record high levels in late-October, and have remained around 1.5 million barrels per day ever since, 250 kbpd above the average levels in the first three quarters of 2017.
For some markets, lack of rack supply has created the need for long-hauls from Oklahoma and other nearby terminals. Some supplies are still flowing to the area, but the market is more tight than usual. Prices will likely reflect the limited supply situation in the coming days.
Mansfield’s supply and logistics teams are committed to keeping our customers running during times of supply tightness. Currently, Mansfield’s teams are watching the situation for changes, and will issue an official alert if the situation worsens.