Midwest Cold Shuts in Refineries

By Dan Luther

While every PADD saw declining refinery utilization rates last week, the strong majority of the decline came from PADD 1 and 2 – a result of the Polar Vortex. Cold weather causes significant operational issues for refineries, which in turn affects fuel supplies regionally. Several refineries in the Midwest and Northeast were hampered by weather. Among the Midwest refineries going offline:

  • Marathon Detroit
  • BP Whiting
  • CITGO Lemont
  • P66/Cenovus Wood River (fire this week)
  • HollyFrontier Tulas
  • MPC Catlettsburg (electrical fire)

Those refineries going offline simultaneously contributed to an 8.7 percentage point decline in refinery utilization rates, falling down to 84.2% in the US’s second most prolific refining area (after the Gulf Coast).

In the Northeast, PBF had a fire at Del City and is attempting to restart this week. P66 also had some unplanned repairs at Bayway Linden. The Northeast has already seen quite low utilization rates, so the outages sent utilization down 4.9 percentage points to 69.7%.

The decline in refinery output contributed to steep draws in PADD 2 (Midwest), though these were partially offset by reduced fuel demand – few want to drive in -50⁰ F weather! PADD 1 (East Coast) saw less of an affect from the cold, with the Northeast region seeing small builds in both diesel and gasoline stocks.

Market Condition Report - Disclaimer
The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.

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