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US refined product stocks fall as hurricanes, maintenance slow refinery runs

Increase font size  Decrease font size Date:2020-09-25   Views:32
US refined product stocks moved lower in the week ended Sept. 18 as weak refinery runs and an uptick in exports outweighed tepid demand, US Energy Information Administration data showed Sept. 23.

Total US gasoline inventories declined 4.03 million barrels to 227.5 million barrels in the week ended Sept. 18, according to the EIA. Distillate stocks moved 3.36 million barrels lower to 175.94 million barrels.
The gasoline draw put inventories just 0.9% above the five year average, the narrowest supply overhang since mid-March. Distillate stocks, however, remain ample at 21% above the five-year average.

Despite having normalized, US gasoline stocks have tightened in some regions. Midwest gasoline stocks, for example, were 8% below the five-year average in the week ended Sept. 18.

The product draws come amid a downturn in refinery runs. Total net crude inputs fell 120,000 b/d to 13.37 million b/d, helping to pull refinery utilization rates 1 percentage point lower to 74.8% of capacity.

Midwest refinery crude demand fell 280,000 b/d to 3.28 million b/d, a 14-week low, as operators idled units for shoulder-season maintenance. This slowdown was offset in part by an uptick in US Gulf Coast refinery demand, which climbed 180,000 b/d to a three-week high 7.03 million b/d.

Still, USGC refinery runs remain depressed by recent hurricane activity.

Phillips 66's 255,600 b/d Alliance refinery in Belle Chasse was shut early last week as Hurricane Sally targeted the New Orleans area. The Alliance shutdown means close to 1 million b/d of crude refining capacity was offline last week in Louisiana, with Phillip's 66's 260,000 b/d refinery and Citgo Petroleum's 418,000 refinery, both in Lake Charles, remaining offline following Hurricane Laura.

USGC planned and unplanned refinery outages are estimated to average around 2.1 million b/d for the remainder of September, Platts Analytics forecasts.

Surging exports also hit gasoline stocks. Exports climbed 47% on the week to 750,000 b/d, the strongest since the week-ended Aug. 14.

Notably, refined product demand remains tepid. While weekly product supplied jumped 1.41 million b/d to 18.44 million b./d, the four-week moving average declined for a fourth straight week to 17.78 million b/d, marking the first time since the week ended July 17 that the moving average has dipped under 18 million b/d.

The four-week moving average of gasoline demand slipped for a third week, falling 160,000 b/d to 8.54 million b/d, and remains roughly 9% below year-ago levels, where it has lingered since early August. Meanwhile the four-week moving average of distillate demand was around 8% below year-ago last week, and was losing ground compared with a deficit of 5% as recently as late-August.

Apple Mobility data shows that US driving activity has steadily declined since the middle of August. The index fell to an average of 134.9 in the week ended Sept. 18, a 10-week low and down from 137.4 the week prior.

Sally blunts crude output, exports rebound
US commercial crude stocks fell 1.64 million barrels last week to 494.41 million barrels, according to the EIA, as lowered production and higher exports offset weak refinery demand.

USGC crude stocks dipped 1.62 million barrels to 265 million barrels. Inventories at the NYMEX delivery point of Cushing, Oklahoma, were flat on the week, edging up just 4,000 barrels to 54.28 million barrels.

Total crude output edged down 200,000 b/d to 10.7 million /d as Hurricane Sally took more Gulf of Mexico production offline last week. At peak on Sept. 17, around 30% of Gulf output was offline due to Sally, according to US Bureau of Safety and Environmental Enforcement data.

USGC crude stocks also saw pressure from an uptick in exports, which climbed 430,000 b/d to 3.02 million b/d, a four-week high.
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