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NOTE: for full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on “methodology”.
FUTURES DAILY SETTLEMENTS
| | MON | TUE | WED | THUR | FRI |
| NYMEX Heating Oil | 310.78 | 311.34 | 308.26 | 310.52 | 309.62 |
| NYMEX RBOB | 312.64 | 315.36 | 314.23 | 311.76 | 311.29 |
MONDAY
Crude futures lost ground during the early hours on mounting concerns over the inability of the US lawmakers to agree on a deficit reduction plan and to raise the $14.3 trillion debt ceiling. Credit ratings agencies could downgrade the US debt rating from its triple-A status if an agreement is not reached by 2 August. Things became fairly rangebound once Europe opened for business, but prices took a sharp dip around midday before regaining a little ground prior the US opening. However, they plunged even lower on the back of a disappointing opening on Wall Street, only to bounce back again as the US dollar took a beating on the currency markets. They then became relatively rangebound again through to the close.
September Brent closed the day down $0.73 at $117.94/bbl, having traded a range between $116.92 and $118.45.
September West Texas Intermediate (WTI) closed the day down $0.67 at $99.20/bbl, having traded a range between $98.52 and $99.87.
TUESDAY
The markets opened in negative territory, but moved up through the early hours on the back of a weaker US dollar. However, prices eased off a little when Europe opened, but then recovered again as the US markets opened. They then went into sharp decline in tandem with weak stock markets only to bounce back and rise to new highs as the dollar lost more ground. They eased off again to close well off the highs, but still in positive territory on expectations that the weekly US stock data could show a draw on crude stocks for the eighth consecutive week.
September Brent closed the day up $0.34 at $118.28/bbl, having traded a range between $116.53 and $119.05.
September West Texas Intermediate (WTI) closed the day up $0.39 at $99.59/bbl, having traded a range between $97.76 and $100.62.
WEDNESDAY
With the weekly US stock figures published late on Tuesday by the American Petroleum Institute (API) showing an unexpected build on crude stocks and a much larger-than forecast build on distillates, the unexpected draw on gasoline failed to come into play. Prices opened the day in negative territory, but then gained some ground in early hours’ trading. However, once Europe opened for business, prices went into decline on concerns over the lack of any progress made in the US regarding its debt ceiling. A mid morning recovery proved short-lived and prices fell further prior the US opening. A disappointing opening on Wall St took WTI down further, although Brent held up a little better, but both benchmarks were deep in negative territory prior the appearance of the stock figures from the Energy Information Administration (EIA). These again showed an unexpected build in crude stocks and larger-than-forecast builds on both gasoline and distillates, which knocked prices down to new lows. However, this seemed to encourage some renewed buying and prices made a good recovery, with Brent briefly breaking back into positive territory, but they were soon falling away again as the US dollar rallied. A late bout of selling pushed both grades back towards the lows, but Brent posted smaller losses.
September Brent closed the day down $0.85 at $117.43/bbl, having traded a range between $117.18 and $118.50.
September West Texas Intermediate (WTI) closed the day down $2.19 at $97.40/bbl, having traded a range between $97.28 and $99.50.
THURSDAY
Crude futures gained during the early hours although trade volumes were typically thin. By the time Europe opened its doors for business, crude prices moved higher as the tropical storm, Don, moved towards Texas Gulf and field operators in the Gulf of Mexico began to shutdown production. After a short dip in prices in the afternoon prices began to regain but failed to break its range-bound price spread. Prices remained range-bound during the early afternoon and surged for a very brief period in the late afternoon after a report indicated that first time claims for unemployment benefits in the US declined, creating some positive sentiment. However the bullish tone was short lived and prices tumbled as law makers in Washington continued to mull over plans to solve its debt problems and raise its self-imposed debt ceiling.
September Brent closed the day down $0.05 at $117.38/bbl, having traded a range between $117.05 and $118.71.
September West Texas Intermediate (WTI) closed the day up $0.04 at $97.44/bbl, having traded a range between $96.51 and $98.01.
FRIDAY
Crude futures started off on a high note during the early hours but with so much bearish news lingering the market including the US debt ceiling issue, Eurozone debt levels and US growth losing momentum, prices weakened. When Europe opened its doors for business prices were largely steady well into the early afternoon but quickly moved lower to set the intraday low. Prices then recovered in a short space of time but tumbled again and failed to set a new low. Towards the close, prices rallied but failed to move out from negative territory.
September Brent closed the day down $0.62 at $116.74/bbl, having traded a range between $115.75 and $117.70.
September West Texas Intermediate (WTI) closed the day down $1.74 at $95.70/bbl, having traded a range between $94.95 and $97.39.
SUMMARY
Over the course of the week September WTI was down $4.17/bbl, while September Brent lost $1.93/bbl.
European naphtha cargo prices remained relatively stable for most of the week before slipping to $982-990/tonne CIF NWE on Friday afternoon. Arbitrages remain closed to Asia and to the US, although some material had moved west regardless. There was less demand than expected from the gasoline industry, while from the petrochemical sector opinions regarding the level of interest in naphtha were mixed. This week's range of $982-1,006/tonne CIF NWE compares with a range of $974-1,010/tonne the previous week.
The consensus is that the market is balanced to long, with activity levels again subdued due to the summer holiday season.
Demand has again been weak, with some sources suggesting that the crack spread should soften further in order to exert a dampening effect on naphtha prices and stimulate demand.
While remaining firmly in negative territory, the crack spread held relatively stable this week, varying between a high of minus $5.90/bbl on Thursday morning, and a low of minus $6.15/bbl on Wednesday afternoon.
Last week it was speculated that an arbitrage to Asia might open in the near future. The east-west spread last week was at $7-8/tonne, with one source saying that a spread of $20/tonne would be required in order to open the arbitrage. However, this week the arbitrage remained closed. With Asian naphtha prices having fallen, by Thursday morning the east-west spread was at $5.50/tonne.
Further downwards pressure on Asian prices followed a second fire at Formosa’s No. 1 cracker in Mailiao, Taiwan on Tuesday, which has delayed its restart. It was taken offline following a fire on 12 May, and had been expected to restart this week. Formosa is a major buyer of naphtha in Asia.
Last week’s unusual occurrence of two Red Sea cargoes moving to northwest Europe instead of Asia was not thought to have been repeated this week. Mediterranean material was again moving to Asia, as is more often the case.
The arbitrage to the US remains closed, although at least one cargo was nevertheless believed to be destined for New York.
High ethanol prices in South America mean that buyers there have recently been showing an interest in European naphtha for gasoline blending. Last week three naphtha cargoes were dispatched from Algeria to Brazil. This week sources had noticed a further two cargoes heading to Brazil. It is thought that one cargo is intended for gasoline blending, the other for the petrochemical industry.
Demand for naphtha from the gasoline industry is slower this week, with smaller than expected quantities being traded. One source pointed out that demand usually comes in waves, and that interest in naphtha should pick up again next week.
The gasoline-naphtha spread is around $80/tonne, compared with the previous week’s figure of $77/tonne.
Continuing the trend of recent weeks, lower prices of LPG compared with naphtha ensured that the former remained the feedstock of choice for petrochemical industry buyers able to switch between propane and naphtha.
The spread between propane and naphtha was around $80-90/tonne, having narrowed from last week’s exceptionally wide spread of $100-110/tonne.
One buyer in the naphtha market said that his company has been focusing almost exclusively on LPG, and that there is plenty of both propane and butane around. This source added that August would be a “good month” for LPG.
However, another market participant had experienced a healthy demand from the petrochemical sector, having sold several cargoes to the industry.
This market participant emphasized that propane cracking is already taking place at maximum capacity. This is believed to be around 300,000/tonnes a month. Furthermore, as the base load is naphtha, significant quantities of this feedstock are still required.
This source went on to say that petrochemical margins are improving and that this should support demand for naphtha into August.
US Gulf Naphtha
US Gulf Naphtha
| N+A naphtha differential to 7.8 RVP unleaded gasoline (DEL) for week ended 29 July in cents/gal |
| | 22 July | Mon | Tue | Wed | Thu | Fri |
| Discount | -18.50/ -18.50 | -19.50/ -19.50 | -19.50/ -19.50 | -18.00/ -18.00 | -18.00/ -18.00 | -20.50/ -17.75 |
| Paraffinic naphtha differential ranges, week ended 29 July in cents/gal |
| | 22 July | Mon | Tue | Wed | Thu | Fri |
| vs Natural gasoline | +1.00/ +1.00 | +1.00/ +1.00 | +1.00/ +1.00 | +1.00/ +1.00 | +1.00/ +1.00 | +1.00/ +1.00 |
HEAVY NAPHTHA MARKET QUIET ON BALANCED SUPPLY AND DEMAND
The market for US Gulf (USG) heavy naphtha saw little activity except for sudden distressed buying. Naphtha production at the refineries has increased because of higher crude runs, leading to little spot-market buying.
In addition, USG premium gasoline differentials have dropped, since the price of regular gasoline in the spot market has strengthened. In the week of 22 July, premium gasoline was priced about 25-30 cents/gal higher than regular gasoline. However, for the week ended 29 July, the spread narrowed to 15-20 cents/gal.
Reformate boosts octane levels in gasoline, and therefore is used at a higher percentage in premium gasoline blends. As the spread between premium gasoline and regular gasoline narrows, so does the profit margin for refinery production of premium gasoline.
In turn, demand for naphtha – the feedstock for reformate – drops, since refiners’ needs are fulfilled by their own production.
DIFFERENTIALS HOLD STEADY IN A THIN MARKET
The market for USG heavy naphtha was thin with only offers reported and no bids on 25 July. Offers were at the same differentials reported on 22 July, suggesting that a done deal would be weaker.
There was no activity reported in the market on 26 July either. Traders said differentials were steady with 25 July. The stronger USG regular gasoline differentials, in addition to the gains for reformulated gasoline blendstock for oxygenated blending (RBOB), led naphtha higher by 4.75 cents/gal.
Late on 26 July, full-range naphtha traded at a discount of 20 cents/gal to US Gulf waterborne gasoline. Full-range naphtha is at a weaker price than heavy naphtha. By this trade, heavy naphtha differentials were assessed 1.5 cents stronger.
At week’s end, prices were discussed slightly stronger, though no deals for heavy naphtha on the USG were completed. On-spec 40 N+A heavy naphtha was thought to be at a discount of 19-22 cents to waterborne gasoline, or 17.75-20.50 cents under Colonial Pipeline 7.8 RVP gasoline.
SPOT ETHYLENE JUMPS, PUSHIN SPOT MARGINS HIGHER FOR ETHANE AND NAPHTHA
| ETHYLENE PRICE | |
| CTS/LB | Contract, USG DEL | Spot, USG DEL pipeline |
| 15-Jul | 56.75 | 60.50 |
| 8-Jul | 56.75 | 57.50 |
| Contract Margins | |
| CTS/LB | Ethane Feed | Naphtha Feed |
| 15-Jul | 19.48 | 23.92 |
| 8-Jul | 20.25 | 25.47 |
| Spot Margins | |
| CTS/LB | Ethane Feed | Naphtha Feed |
| 15-Jul | 27.84 | 38.85 |
| 8-Jul | 25.61 | 38.32 |
Ethylene contract margins from cracking ethane fell, countering the rise in the value of margins on the spot market using ethane. Margins dropped by 0.77 cents/lb on a 1.1% climb for ethane. In addition, co-products plunged by 11.5%, mainly on lower butane prices.
Contract margins based on naphtha feedstock dropped by 1.55 cents/lb. Naphtha feedstock prices increased by 0.6% and co-products slipped by 0.8%.
Spot ethylene margins based on ethane feedstock increased by 2.23 cents/lb as higher feedstock costs and lower co-product credits were overshadowed by a rise in spot ethylene prices of more than 5%. Margins based on naphtha rose by a smaller measure, moving up by 0.53 cents/lb. The 1.6% drop in co-product credits reduced gains for the margin from the 5% increase in spot ethylene.
US GULF SPOT GASOLINE MARKET IS STAGNANT DEPLETED STORAGE
Activity in the USG gasoline spot market was almost non-existent – a trader could have slept through the week and would have missed very little.
The week started, for all crude product markets, particularly thin.
A primary reason for the lack of market activity is the slight storage space available for bringing in more products. The high crude utilisation rates have pumped out a great deal of end products that refiners are storing. The tank farms at refineries are filling up, and some of that product is coming into the market for sale.
On 26 July, there was some strengthening for the differentials of all reported gasoline grades, though traders said the gains were not related to any refinery issues. Buying activity picked up, but the differentials tumbled the following day.
Gasoline differentials on the USG weakened on 27-28 July as Tropical Storm Don’s trajectory shows it will bypass refineries in the Gulf coast region. This extended the drop in differentials on Thursday, which weakened as the storm started to turn away from the Houston and Corpus Christi region.
If Tropical Storm Don had hit a few refineries, causing equipment malfunction, then supply on the spot market would have tightened while the distressed refineries would be in higher demand for product to meet customer needs.
In addition to this, prices for USG spot gasoline plunged on Friday as trading was in comparison with the September reformulated gasoline blendstock for oxygenated blending (RBOB) contract. Prices fell from the day before by about 6.5 cents/gal.
Unleaded regular spot gasoline traded at a weekly high of $3.130/gal and a low of $3.0150/gal.
| EUROPE FEEDSTOCKS OVERVIEW |
ICE gasoil futures began the week at $978.75/tonne, then fluctuated before finishing at a low of $971/tonne on Friday afternoon.
Sources in the gasoil cargo market had again noticed at least low levels of demand for heating oil this week.
Nevertheless, the market was described as quiet, with many participants taking holidays or attending various summer events.
The market is said to be relatively balanced, with supply meeting demand.
By Thursday, bids over ICE gasoil were flat to plus $1/tonne, while offers were at plus $3/tonne. This compares with premiums of $9/tonne a week earlier.
The gasoil crack spread is around $13/tonne, down slightly from last week’s figure of $14.50/bbl.
The contango between August and September prices held steady at around $3/tonne.
The 0.1% sulphur gasoil barge market was quieter this week, with only five or six trades taking place on most days.
One source described the market as “dead”, with the summer holiday season adding to the lack of activity.
As was the case last week, high prices are thought to be a significant reason for the lack of demand. The aforementioned source believes that prices ought to fall by $100-200/tonne in order to stimulate demand.
Without a drop in prices, it was speculated that buyers could hold out until October before purchasing further quantities of material.
Last week’s contango of $2.75/tonne between August and September prices had flattened slightly to $2/tonne.
Discounts to ICE gasoil were around minus $1/tonne, up from minus $2/tonne a week earlier.
The German 50ppm gasoil barge market is also experiencing low levels of activity.
There is again said to be little selling interest and less product available. Coupled with low levels of demand, the market is rendered quite balanced.
Summer holidays and high prices are again the reasons given for this lack of activity.
It was suggested that a major restocking of material may not happen until September, or possibly later.
Water levels on the river Rhine are considered to be reasonable this week, with no major issues having been reported.
The contango between August and September prices held steady at around $3/tonne.
Premiums over August ICE gasoil are around $28-29/tonne, similar to $29/tonne a week earlier.
Activity levels are extremely low in the ultra low sulphur diesel (ULSD) barge market. Two sources were of the opinion that there is virtually no demand at all.
Premiums over ICE gasoil were in the late $20s/tonne, compared with in the early $30s/tonne a week earlier.
The ultra low sulphur diesel (ULSD) cargo market is said to be quieter this week, with premiums over ICE gasoil having slipped from $35/tonne last week to the high $20s/tonne this week.
The summer holiday season has also led to subdued activity in the fuel oil markets.
The low sulphur market remains tight, while the high sulphur market is exceptionally short, with three to four cargoes having been booked to head to Asia.
A market source said that more imports from Russia are required in order to ease the tightness.
The previous two weeks have seen problems with the loading of barges in Rotterdam, which has resulted delays of several days. This week the situation had eased slightly, with the process said to be flowing noticeably better.
For the first time in several weeks, the price spread between high and low sulphur material narrowed from around $50/tonne last week to a difference of around $30/tonne on Thursday afternoon.
By Friday, the average price of 1% sulphur material was $691.65/tonne FOB ARA, compared with last week’s figure of $697.70/tonne FOB ARA. For 3.5% sulphur material, it was $658.05/tonne FOB ARA, compared with $645.75/tonne FOB ARA a week ago.
The Amsterdam-Rotterdam-Antwerp (ARA) region continues to experience tight LPG supply this week. Sources say that inventories are low and that refineries in Germany are sold out of product. One source also believes that many volumes in the market are being bought and sent to China to satisfy demand there, further exacerbating tight conditions. One source believes that if tight conditions continue, prices could increase to levels over $1,000/tonne FOB ARA for both butane and propane.
It is thought that activity in the ARA region has diminished as buyers are being deterred by high prices.
Some also believe that the Mediterranean region is experiencing short supply which is exerting upwards pressure on FOB prices there.
The VGO market remains quiet, and little changed from the previous week.
A source said that supplies are more limited this week, but was unsure why.
Premiums for high sulphur material edged up from $4/bbl to $5/bbl, while low sulphur material crept from $6/bbl to $7/bbl.
RBOB MAINLY DOWN ON ECONOMIC UNCERTAINTIES AND HIGH GASOLINE INVENTORIES
Debate on Capitol Hill concerning legislation on the debt ceiling was the main influence on the futures market throughout the week. The deadline for the debt ceiling is 2 August. If action is not taken, the US would defaulting on debt payments, said Treasury Secretary Timothy Geithner.
If this were the case, the US economy would take a hit, which could eventually lead to lower consumption of gasoline and a stall on hiring or even a rise to unemployment figures.
Analysts suggest the US will raise the debt ceiling at the last minute, but in the meantime, companies have slowed progress and stalled some hiring on market uncertainties.
Other fundamental contributors to lower futures are higher gasoline prices at the pump and saturated with gasoline, as reported in the inventory report for the week of 22 July.
Prices rose on 26 July for reformulated gasoline blendstock for oxygenated blending (RBOB) due to the US Conference Board’s Consumer Index rising from an eight-month low. The index for July was 59.5, up from a revised 57.6 in June.
MOTOR GASOLINE INVENTORIES RISE ON DEMAND DESTRICTUION
US motor gasoline inventories climbed for the second consecutive week, according to the US Energy Information Administration (EIA). Inventories were up 1.0m bbl to reach 213.5 bbl for the week of 22 July, compared with a gain of 800,000 bbl the prior week.
The USG had a draw of 1.0m bbl, falling to 70.9m bbl from 71.9m bbl, for the week of 22 July.
Refinery production nationwide dropped by 36,000 bbl/day to 9.292 bbl/day for the week of 22 July. This was lower than production at this time in 2010, but higher than production during the same week in 2009.
Production in the USG was down at 2.032m bbl/day, compared with 2.106m bbl/day the prior week.
Consumption was also down for the week of 22 July at 8.999m bbl/day, down by 0.3%. Consumption has dropped by 3.3% in the last four weeks compared with the same period in 2010, according to the EIA.
Production continued to exceed consumption for the third consecutive week, as refinery production nationwide for the week of 22 July exceeded consumption by 293,000 bbl/day.
Finally, imports dropped to 662,000 bbl/day for the week of 22 July, compared with 881,000 bbl/day of motor gasoline the prior week.
REFINERY RATES RELAPSE ON US GULF REFINERY UPSETS
Refinery utilisation nationwide dropped by 0.7 percentage points after having reached a 2011 high of 90%. The US Energy Information Administration (EIA) reported utilisation at 88.3% for the week of 22 July.
The US Gulf (USG) contributed significantly to the weakened rates, falling to 87.3% from 90.1%. A number of refinery blips caused the lower utilisation rates.
These events included the shutdown of a major crude unit, maintenance on a hydrogen compressor, upsets at two fluid catalytic cracking (FCC) units, repair of a sulphur recovery unit (SRU) and a power blip causing several units at a refinery to go off line.
NATURAL GAS FALLS ON HIGHER INVENTORIES AND EXPIRY OF THE AUGUST CONTRACT
Natural gas futures plunged on 28 July, the first day for September as the prompt-month, on a higher-than-estimated injection rate to government storage the week of 22 July, according to the EIA. This resulted in a stark sell-off of futures, falling by 11.8 cents. By midday, prices rebounded to a loss of 8 cents as a result of bargain buying.
Inventories increased by 43 billion cubic feet (bcf) for the week of 22 July, while the expected increase ranged from 38bcf -41bcf.
There was little price change the rest of the week, except for natural gas futures, which trended lower. There was little support from weather-related incidents, so prices moved lower in line with the rest of the NYMEX energy complex. While midweek prices dropped on a sell-off before the expiry of the August futures contract.
ETHANE FOLLOWS ETHYLENE PRICES HIGHER AND GAINS ON STRONG DEMAND
Ethane prices strengthened in the spot market on increased prices for ethylene. As ethylene spot prices rise on demand, ethane prices follow. Demand for ethane was tempered by the outage of an ethylene cracker, however, demand for ethane still outpaced supply during the week.
Production problems have forced ethylene suppliers and producers to buy from the spot market in order to fulfil customer contracts, which have driven up ethylene spot prices.
Flint Hills Resources did not plan to restart its Port Arthur facility in Texas after a shutdown during 23-24 July until after the weekend. The plant has ethylene capacity of 621,100 tonnes/year.
This upped ethylene prices, and spot ethane prices followed. Strong demand remained despite the Flint Hill cracker outage, with demand outpacing supply.
SPOT ETHYLENE JUMPS, PUSHIN SPOT MARGINS HIGHER FOR ETHANE AND NAPHTHA
| ETHYLENE PRICE | |
| CTS/LB | Contract, USG DEL | Spot, USG DEL pipeline |
| 15-Jul | 56.75 | 60.50 |
| 8-Jul | 56.75 | 57.50 |
| Contract Margins | |
| CTS/LB | Ethane Feed | Naphtha Feed |
| 15-Jul | 19.48 | 23.92 |
| 8-Jul | 20.25 | 25.47 |
| Spot Margins | |
| CTS/LB | Ethane Feed | Naphtha Feed |
| 15-Jul | 27.84 | 38.85 |
| 8-Jul | 25.61 | 38.32 |
Ethylene contract margins from cracking ethane fell, countering the rise in the value of margins on the spot market using ethane. Margins dropped by 0.77 cents/lb on a 1.1% climb for ethane. In addition, co-products plunged by 11.5%, mainly on lower butane prices.
Contract margins based on naphtha feedstock dropped by 1.55 cents/lb. Naphtha feedstock prices increased by 0.6% and co-products slipped by 0.8%.
Spot ethylene margins based on ethane feedstock increased by 2.23 cents/lb as higher feedstock costs and lower co-product credits were overshadowed by a rise in spot ethylene prices of more than 5%. Margins based on naphtha rose by a smaller measure, moving up by 0.53 cents/lb. The 1.6% drop in co-product credits reduced gains for the margin from the 5% increase in spot ethylene.
LPG MARKET SEES MIXED TRADING TRAJECTORIES FOR THE WEEK
The spot market for liquefied petroleum gas (LPG) saw prices move independently of one another throughout the week. Propane and normal butane saw slight gains from 22 July, while isobutane slipped.
Propane made the strongest moves during the week, ranging from $1.51250-$1.5650/gal. There were few sellers in the market, limiting material. As the end of summer approaches, propane will gather strength ahead of the harvest season, so prices are not likely to see a significant drop for a while.
The normal butane market saw an increase of about 4 cents from 22 July with a range of $1.8875-1.9400/gal. Prices continued to increase on strong demand from the olefins market.
Isobutane fell from trades of higher than $2.11/gal on 22 July during the week and hit a low of $2.08/gal. The slight dip resulted from less demand in the gasoline market. The spread for premium gasoline above regular gasoline narrowed, leading refiners to slow blending for premium gasoline. In turn, this lowered the demand for isobutane.
VGO PREMIUMS STILL STRONG ON LOW SUPPLY FROM CLOSED EUROPEAN ARB
The spot market for vacuum gas oil was thin with few deals completed and scarce supply. The arbitrage from Europe remains closed, and with the high crude runs, refiners are processing all of the VGO they produce. This leaves no excess VGO to sell on the spot market.
The premium of Brent crude above West Texas Intermediate (WTI) ranged from $18.69-21.04/bbl. With VGO in Europe trading at a premium to Brent crude, USG spot traders cannot afford the high prices, and European traders cannot make a profit by dropping the differentials.
This has limited supply of quality VGO on the USG, causing prices to climb.
On 26 July, high-sulphur (2.0% maximum sulphur) sold for deliver to Houston at a premium of $25.50/bbl to WTI. In addition, high-quality low-sulphur (0.5% maximum sulphur) VGO traded at $32.25/bbl over WTI for delivery to the Mississippi river.
At week’s end, light-sulphur was discussed at higher at 32.50/bbl over WTI, while high-sulphur VGO was slightly stronger at a premium of $25.50-26.50/bbl .
PRODUCTION NEWS
A sulphur recovery unit (SRU) No 1 experienced instrumentation problems at Alon’s 60,000 bbl/day Big Spring refinery in Texas on 22 July, according to a filing with the Texas Commission on Environmental Quality (TCEQ). As a result, the incinerator would not allow a relight, causing flow to the SRU to be at minimal levels. The event did not affect the rest of the refinery.
Valero’s 225,000 bbl/day Texas City refinery lost power at Complex 7, resulting in flaring, on 25 July. Spokesman Bill Day said the power outage was more of a “blip” that affected a compressor associated with the coker. There was no material impact on production.
The flare gas recovery system used to reduce emergency flaring at Total’s Port Arthur refinery in Texas was over-supplied after a lightning strike shut down several units on 26 July. One unit affected was the coker. Units were being restarted as quickly as possible.
Houston Refining, a subsidiary of LyondellBasell, had flaring caused by the upset of a fluid catalytic cracker (FCC) on 27 July at its 280,390 bbl/day Houston refinery. Operational adjustments were made to the FCC to minimise flaring.
An ultracracker at BP’s 406,570 bbl/day Texas City refinery near Houston had an instrumentation problem that caused flaring on 28 July. There was no further information on a potential restart time.
| Historical Stocks | 7/23/2010 | 7/22/2011 | | Change | |
| Crude Oil | 360.8 | 354.0 | -1.9% | -6.8 | m bbl |
| Gasoline | 222.2 | 213.5 | -3.9% | -8.7 | m bbl |
| Jet Fuel | 48.3 | 45.0 | -6.8% | -3.3 | m bbl |
| Distillate | 167.5 | 151.8 | -9.4% | -15.7 | bbl/d * |
| Residual | 40.3 | 37.5 | -6.9% | -2.8 | bbl/d * |
| Propane/Propylene | 53.0 | 48.2 | -9.1% | -4.8 | bbl/d * |
| figures in thousand bbl | | | | | |
| Cumulative Daily Demand | 7/23/2010 | 7/22/2011 | | Change | |
| Total Products Supplied | 19,180 | 19,017 | -0.8% | -163.0 | m bbl |
| Gasoline | 9,078 | 9,012 | -0.7% | -66.0 | m bbl |
| Jet Fuel | 1,391 | 1,421 | 2.2% | 30.0 | m bbl |
| Distillate | 3,737 | 3,727 | -0.3% | -10.0 | bbl/d * |
| Residual | 526 | 531 | 1.0% | 5.0 | bbl/d * |
| Propane/Propylene | 1,112 | 1,056 | -5.0% | -56.0 | bbl/d * |
| figures in thousand bbl | | | | | |
| Gasoline | 15-Jul | 22-Jul | | Change | |
| US Stocks | 212.5 | 213.5 | 0.5% | 1.00 | m bbl |
| PADD 1 | 55.7 | 55.9 | 0.4% | 0.20 | m bbl |
| PADD 3 | 71.9 | 70.9 | -1.4% | -1.00 | m bbl |
| Production | 9,328 | 9,292 | -0.4% | -36 | bbl/d * |
| Demand | 9,028 | 8,999 | -0.3% | -29 | bbl/d * |
| Imports | 881 | 662 | -24.9% | -219 | bbl/d * |
| * figures in thousand bbl |
| Distillate | 15-Jul | 22-Jul | | Change | |
| US Stocks | 148.5 | 151.8 | 2.2% | 3.30 | m bbl |
| PADD 1 | 54.9 | 57.6 | 4.9% | 2.70 | m bbl |
| PADD 3 | 47.4 | 47.7 | 0.6% | 0.30 | m bbl |
| Production | 4,578 | 4,559 | -0.4% | -19 | bbl/d * |
| Demand | 3,402 | 3,458 | 1.6% | 56 | bbl/d * |
| Imports | 92 | 161 | 75.0% | 69 | bbl/d * |
| * figures in thousand bbl |
| Propane/Propy. | 15-Jul | 22-Jul | | Change | |
| US Stocks | 46.6 | 48.2 | 3.4% | 1.60 | mil. bbl |
| PADD 1 | 4.1 | 4.2 | 2.4% | 0.10 | mil. bbl |
| PADD 3 | 21 | 21.5 | 2.4% | 0.50 | mil. bbl |
| Production | 1,072 | 1,061 | -1.0% | -11 | bbl/d * |
| Demand | 727 | 769 | 5.8% | 42 | bbl/d * |
| Imports | 67 | 64 | -4.5% | -3 | bbl/d * |
| * figures in thousand bbl |
Source: US Energy Information Administration (week ended 22 July)
