MOSCOW (MRC) -- Imports of petroleum products-gasoline, distillate, and other products into the East Coast region of the United States increased in March 2021, according to Hydrocarbonprocessing.
Rising imports resulted from lower domestic supply, higher demand, and higher domestic petroleum product prices compared with prices in Europe.
In March, East Coast petroleum product imports averaged 1.4 million barrels per day (b/d). In addition, East Coast gasoline imports averaged 737,000 b/d, the highest March level since 2009, and East Coast distillate imports averaged 421,000 b/d, the highest March level since 2003.
Petroleum product imports into the East Coast region increased primarily for three reasons.
First, domestic supply was reduced, due in part to the extreme winter weather in February 2021, which disrupted operations at several refineries in the US Gulf Coast region, where more than half of US refinery capacity is located. Because significantly more petroleum products are consumed in the East Coast region than its regional refineries produce, the region relies on imports and pipeline supplies from the US Gulf Coast region.
When production is disrupted in the U.S. Gulf Coast region (as was the case in February and March 2021), the East Coast region relies more on imports to meet its petroleum product demand. Lower supply, particularly in the East Coast region, has also been due, in part, to lower East Coast refining capacity after the 335,000 b/d Philadelphia Energy Solutions (PES) refinery closed in June 2019. According to estimation, closing the Philadelphia refinery reduced East Coast gasoline supplies by approximately 160,000 b/d and distillate supplies by approximately 100,000 b/d.
Second, domestic demand for petroleum products increased. US gasoline consumption increased to 8.6 million b/d in March, the highest level since February 2020, and distillate consumption increased to 4.0 million b/d, the highest level since November 2019.
Third, the prices of US petroleum products have been higher than in Europe. In March, the New York Harbor gasoline spot price averaged 30 cents per gallon (gal) more than gasoline in Europe, the widest spot price spread between these markets in the past 10 years (2012–2021).
As MRC informed earlier, in 2020, total consumption of fossil fuels in the United States, including petroleum, natural gas, and coal, fell to 72.9 quadrillion British thermal units (Btu), down 9% from 2019 and the lowest level since 1991, according to US Energy Information Administration's (EIA) Monthly Energy Review.
We remind that most units were shut on Sunday night and Monday morning (15-16 February) at Marathon Petroleum Corp's 585,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, as temperatures plunged due to a Arctic cold front reaching the Gulf Coast. They resumed operations in the first half of March.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC