IHS Markit Hurricane Update (September 20, 2017)
HOUSTON, Sep 20, 2017 (BUSINESS WIRE) --
Copyright Business Wire 2017
IHS
Markit (Nasdaq: INFO), a world leader in critical information,
analytics and solutions, is releasing periodic updates on the impact of
Tropical Storm Harvey on the crude oil, refining and chemical sectors.
A summary of the latest update follows below (As of end of day September
19, 2017).
The complete report is available at http://bit.ly/2wyqfXD
Refining
--
As of September 19, IHS Markit estimates that 15 of the 20 affected
refineries are at or near normal operating rates. Four of the other
five are actively in the process of restarting and ramping up runs.
--
As of yesterday, the NYMEX RBOB spot price was essentially back to its
pre-Harvey level. However, this price recovery was far slower than for
any previous hurricane, underscoring the fact that Harvey was the
single greatest disruptive event to ever afflict the U.S. refining
industry.
U.S. Fuels Markets
--
Currently the U.S. retail average gasoline price stands at $2.615/gal
after falling over the past several days. Some of the Southeast states
that have jumped the most in the post-Harvey environment have mirrored
the national average decline.
--
Florida has been one of the states that has been more slow to react to
the downdrafts as average prices are down about a penny week on week
near $2.70/gal.
--
The U.S. Energy Information Administration (EIA), in its weekly
statistical bulletin, is likely to show another gasoline draw. The
previous week's report showed the highest draw on record at 8.4
million bbl in the U.S. highlighted by large draws on the East Coast
and Gulf Coast (PADDs 1 & 3). The draw may be a bit smaller than the
previous week as imports are likely to start arriving and the waiving
of mandatory Jones Act vessels between U.S. ports has offered a bit of
breathing room.
--
Gasoline demand over the past week or so has behaved as expected, in a
post-Harvey, pre-Irma environment. According to IHS Market subsidiary
OPIS, data that tracks retail gasoline volumes at more than 10,000
stations nationwide, demand destruction was evident in the Southwest
(which includes Texas) and a spike in the Southeast (including
Florida, Georgia and South Carolina).
--
According to data for the week ending September 9th Southwest gasoline
demand was down more than 21 percent from the prior week. The
post-Harvey demand destruction was a function of flooded roads, closed
offices and businesses as well as stations that were not operating.
--
Meanwhile, pre-Irma evacuations provided a spike in gasoline demand of
nearly 19 percent in the Southeast. Refiners have focused squarely on
getting more regular gasoline to the market and as a result, premium
gasoline and diesel supplies have tightened significantly.
Crude
--
Last week's EIA Weekly Petroleum Status Report estimated that U.S.
crude oil production had rebounded to nearly 9.4 MMb/d, up from 8.8
MMb/d, indicating a quick upstream recovery from Hurricane Harvey.
--
Based in part on data and guidance from U.S. onshore operators--who are
responsible for most of the growth in total U.S. crude output--IHS
Markit expects U.S. production to continue rising through the end of
the year.
--
Unsurprisingly, EIA data also show that U.S. crude oil inventories
have risen by over 10 million barrels over the past two weeks, almost
entirely in the U.S. Gulf Coast and Cushing, Oklahoma. Another crude
stock build is likely in this week's report, since it may reflect a
surge of imported crude into re-opened Gulf Coast ports as cargoes
delayed by the storm unload.
--
The Brent-WTI spread still remains above $5 per barrel, compared to
about $3 before Harvey, reflecting the relative crude imbalance
between the U.S. Gulf and the international market. At the same time
there has been increased tightness in the Brent market, reflecting
higher European refinery activity in response to stronger margins
caused by U.S. refinery outages.
--
IHS Markit expects the Brent-WTI spread will normalize back to its
pre-storm level as refining activity returns to normal and crude
export volumes ramp up. Additionally, the wide spread is likely
discouraging additional imports into the U.S., so imported volumes may
eventually subside.
--
The reopening of the Zydeco pipeline, which can deliver as much as
325,000 b/d of crude from Texas to Louisiana, is another factor that
should help alleviate the Texas crude bottleneck.
Natural Gas Liquids (NGLs)
--
Nearly one month after the hurricane, it appears that there was no
long-term damage to NGL supply from either gas plant or refinery
operations.
--
The Enterprise Mont Belvieu complex suffered a slight setback on
September 15th when it suffered a fire at its West Storage facility at
its Mont Belvieu fractionation complex. Enterprise Products Partners
said on Monday that a fire late on Friday had minimal impact on its
natural gas liquids operations with minimal damage to equipment at
Mont Belvieu in Texas. Repairs are expected to be completed in the
fourth quarter, the company said.
--
NGL export capacity is back online with terminals now loading cargos.
The return of exports from the U.S. Gulf Coast has led to downward
pressure to the Japan to Mont Belvieu LPG differentials.
Chemicals
Please see the full
report for detailed updates on:
--
Ethylene
--
Propylene
--
Polyethylene
--
Polypropylene
--
Butadiene
--
Chlor Alkali/Vinyls
--
EO/MEG/PET/PTA
--
Benzene
--
Toluene
--
Mixed Xylenes
--
Paraxylene
--
Styrene
--
Cumene/Phenol
--
Cyclohexane
--
Methanol
The complete report is available at http://bit.ly/2wyqfXD
About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information,
analytics and solutions for the major industries and markets that drive
economies worldwide. The company delivers next-generation information,
analytics and solutions to customers in business, finance and
government, improving their operational efficiency and providing deep
insights that lead to well-informed, confident decisions. IHS Markit has
more than 50,000 key business and government customers, including 85
percent of the Fortune Global 500 and the world's leading financial
institutions. Headquartered in London, IHS Markit is committed to
sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd and/or its
affiliates. All other company and product names may be trademarks of
their respective owners (C) 2017 IHS Markit Ltd. All rights reserved.
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SOURCE: IHS Markit
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