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Planned 4Q 2018 refinery outages not expected to constrain fuel availability

November 06/2018

MOSCOW (MRC) -- The U.S. Energy Information Administrationís (EIA) latest analysis of planned refinery outages for the fourth quarter of 2018 finds that planned outages in the United States are not likely to cause a shortfall in the supply of petroleum productsóincluding gasoline, jet fuel, and distillate fuelórelative to expected demand, either nationally or within any U.S. region, said Hydrocarbonprocessing.

EIA has reached this conclusion despite the current high level of U.S. gasoline demand, which so far in 2018 has been close to the record high seen in 2017.

EIAís national and regional conclusions are the result of simulating regional monthly supply based on assumptions about refinery operations. The report considers planned shutdowns of refinery units as reported by Industrial Info Resources (IIR) and provides EIA's analysis of the implications of outages affecting ACDU, FCCU, CRU, HU, and CU.

Regional supply and demand balances are more valuable than U.S. national balances because pipeline infrastructure, geography, and marine shipping regulations constrain the amount of product that can flow between regions in the United States. Barring unusually high unplanned outages, planned outages that extend beyond schedule, or higher-than-expected demand, the supply of gasoline, jet fuel, and distillate fuel will be adequate in all regions through December.

Planned refinery maintenance in the East Coast will be moderate in the fourth quarter of 2018, except for outages as a result of maintenance on hydrocracking capacities in October, which will exceed 50% of regional capacity. In October, planned maintenance for crude distillation capacity will reach a peak average of 243,000 barrels per day (b/d), or 19% of regional capacity. Production losses associated with planned maintenance could be offset by movements from other regions, by imports, and by drawing down inventories.

Planned outages in the Midwest in the fourth quarter of 2018 will be moderate, except for crude distillation and coking capacities in October and reforming capacity in October and November, which are close to or exceed the previous 10-year maximum. Nevertheless, EIA expects supply of petroleum products to be adequate to meet domestic demand in the Midwest during the fourth quarter. Production losses from planned outages in October and November will average 235,000 b/d and 107,000 b/d in gasoline, 49,000 b/d and 24,000 b/d in jet fuel, and 164,000 b/d and 48,000 b/d in distillate fuel, respectively.

Planned outages in the Gulf Coast in the fourth quarter will be light, and regional inventories appear to be sufficient to offset lost production from those planned outages. More than half of the refining capacity in the United States is located in the Gulf Coast region, and as a result, the region produces far more petroleum products than it consumes. The Gulf Coastís surplus production supplies other U.S. regions, mainly the East Coast and the Midwest, as well as international markets. EIAís calculations indicate that planned refinery outages in the Gulf Coast will result in light production losses in petroleum products. Planned outages will result in production losses of 96,000 b/d in gasoline and 99,000 b/d in distillate fuel in October. For the fourth quarter, total estimated production loss as a result of the planned outages accounts for 4.3% of existing gasoline inventory, 2.2% of jet fuel inventory, and 8.4% of distillate inventory as of the week ending August 31, 2018. Regional inventories will likely be sufficient to account for lost in-region production.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, petrochemistry, Crude oil.
Category:General News
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