Refineries Continue to Recover From Polar Vortex
March 25, 2021
Propane stocks were up 240,000 barrels putting total stocks at 41.269 million and last year at this time there were 59.424 million barrels. The build in this week’s report is the first build reported since late October 2020. This maybe the signal that the decline season for propane is over for now and the build up can begin again. If that thought does come true, then this the market has seen stocks decline 60.7 million barrels from the fall 2020 peak to a March 2021 low. The largest draw down was 64 million barrel in the 2016-2017 season. Midwest stocks were up 559,000 barrels and Gulf Coast stocks were down 376,000 barrels. Total Midwest stocks sit at 9.586 million barrels and last year there were 10.539 million barrels. Gulf Coast stocks are at 25.544 million barrels and last year there were 43.081 million barrels. US propane production was up near 2.3 million bpd and exports were also up back near 1.3 million barrels per day.
The DOE inventory report said that crude oil stocks were up 1.91 million barrels putting total stocks at 502.711 million barrels and last year there were 455.360 million barrels. Gasoline stocks were up 204,000 barrels putting total stocks at 232.279 million barrels and last year there were 239.282 million barrels. Distillate stocks were up 3.806 million barrels putting total stocks at 141.553 million barrels and last year there were 124.442 million barrels. Refinery run jumped up 5.50% to 81.60% of capacity closer to where they were prior to the Texas Freeze. Distillates stocks are still above the three year average by a decent amount and I have questions why did diesel basis and price for us here in the group market rally so much the last few weeks. Distillate stocks in the group are at 25.783 million barrels and last year there were 31.197 million which puts us 5.414 million behind last year and we are 6.1 million behind the three year average. So, the Midwest is low on stocks and the disruption to refineries did not improve that situation, but hopefully increased refinery runs and some recent questions about demand might give the Midwest a chance to make some progress. But the level of stocks in the Midwest does bear us watching. Refinery runs jumped in this week’s report and diesel production averaged 4.6 million bpd so that will be helpful.
There are many comments about the stuck tanker in the Suez Canal pushing prices yesterday, and it is still stuck. But everyone knows this is just a temporary thing and that if that is all that rallied prices it doesn’t have a long time to last. It looks like Sunday or Monday the ship should be free. There is a large backlog of ships now being reported and Bloomberg did a rough estimate and said that there is about $9.6 billion worth of daily marine traffic halted by the blockage. This will certainly have some ripples in the global economy.
German Chancellor Angela Merkel reversed the lockdown order in Germany yesterday and that helped turn gasoline prices around in Europe.