Imports of petroleum products — gasoline, distillate, and other products — into the East Coast region of the US increased in March 2021, according to the US Energy Information Administration (EIA).
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 bpd. In addition, East Coast gasoline imports averaged 737 000 bpd, the highest March level since 2009, and East Coast distillate imports averaged 421 000 bpd, 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 US 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 bpd Philadelphia Energy Solutions (PES) refinery closed in June 2019. The EIA estimates that closing the Philadelphia refinery reduced East Coast gasoline supplies by approximately 160 000 bpd and distillate supplies by approximately 100 000 bpd.
Second, domestic demand for petroleum products increased. US gasoline consumption increased to 8.6 million bpd in March, the highest level since February 2020, and distillate consumption increased to 4 million bpd, 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 US¢30/gal. more than gasoline in Europe, the widest spot price spread between these markets in the past 10 years (2012 – 2021).
The New York Harbor spot price for ultra-low sulfur diesel (ULSD), which is a subset of distillate, averaged US¢19/gal. more than the spot price for Europe’s gasoil (the name for ULSD in Europe) in March and has been more than US¢10/gal. higher than Europe’s gasoil spot price since November 2020.
In warmer months, distillate demand typically decreases as a result of less heating demand, while gasoline demand typically rises because of more driving in the summer. According to the EIA’s ‘Weekly Petroleum Status Report’ data, distillate imports into the East Coast region averaged 208 000 bd from 2 April 2 through 4 June, and gasoline imports averaged 816 000 bpd.
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