More refineries come off line in Harvey’s wake

[Elderberry]

Washington Post By Steven Mufson August 29/2017

Deadly tropical storm Harvey delivered its second punch on the U.S. Gulf Coast on Wednesday, adding to the misery of thousands in the region and keeping its tight grip on the core of the U.S. energy industry.

Harvey, which made its first landfall as a Category 4 hurricane over the weekend, has left at least 20 dead and thousands displaced in its aftermath of record-shattering rain and flooding.

It has knocked out more than 20% of total U.S. refining capacity, which is highly concentrated along the Gulf Coast. More refineries are now shut down, including the nation’s largest, Motiva Enterprises’s Port Arthur refinery, which had been running at limited capacity.

“We view persistent refinery and midstream capacity outages as the two biggest potential sources of sustainable disruptions, in turn creating risk that the ongoing recovery in production will only be partial,” analysts at Goldman Sachs said in a note Wednesday.

The refinery shutdowns, port closures, and production disruptions have left energy markets long 1.9 million barrels a day of crude, short 1.1 million barrels a day of gasoline, and short 800,000 barrels a day of distillates since Thursday, the day before the storm hit, the Goldman analysts said.

More: http://www.marketwatch.com/story/more-refineries-come-off-line-in-harveys-wake-2017-08-30

[IsailedawayfromFR]

The only positive note I can offer is that the US, particularly the Gulf Coast, has such an amount of refineries running so efficiently, that we have have the ability to create a surplus of products so much that exports have been increasing. ( @thackney , correct me if this is incorrect).

Means we also have the ability to better satisfy domestic needs when refineries are down for periods like this.  All we have to do is curtail some of the exports and divert to domestic usage.

[thackney]

The only positive note I can offer is that the US, particularly the Gulf Coast, has such an amount of refineries running so efficiently, that we have have the ability to create a surplus of products so much that exports have been increasing. ( @thackney , correct me if this is incorrect).

Means we also have the ability to better satisfy domestic needs when refineries are down for periods like this.  All we have to do is curtail some of the exports and divert to domestic usage.

They won't need to curtail exports.  Stocks will cover it.  Price hikes will pay for extra transportation in distribution.  Not to mention this part of the country has greatly reduced consumption until more recovery.

[thackney]

They won't need to curtail exports.  Stocks will cover it.  Price hikes will pay for extra transportation in distribution.  Not to mention this part of the country has greatly reduced consumption until more recovery.

@IsailedawayfromFR

I realize now I forgot something related.  Essentially all the ports were shut down in the area.  The are reopening, but exports have certainly been curtailed without ships in to move them.  Status of ports can be found at:

https://energy.gov/sites/prod/files/2017/09/f36/Hurricane%20Harvey%20Event%20Summary%20%2313.pdf

[IsailedawayfromFR]

All of which points to this country having less to worry about when refineries are temporarily offline.

Not only are exports limited due to port closures, but there are half a million cars sitting in water that don't require fuel either.