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EIA: Harvey caused refinery runs to drop

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Hydrocarbon Engineering,

The US Energy Information Administration (EIA) reports that Hurricane Harvey caused substantial disruptions to crude oil and petroleum product supply chains. It also increased petroleum product prices.

For the week ending 1 September 2017, gross inputs to refineries in the US Gulf Coast fell 34% from the previous week to 3.2 million bpd. This was the largest drop since Hurricanes Gustav and Ike in 2008. Weekly refinery utilisation in the region fell from 96% to 63%, while other areas of the country remained virtually unchanged.

The EIA notes that many refineries in the US Gulf Coast region either reduced runs or shut down in its aftermath of Hurricane Harvey.

Many crude oil and petroleum product pipelines were also affected by the hurricane, including the Colonial Pipeline system, which connects 29 refineries and 267 distribution terminals and carries up to 2.5 million bpd of gasoline, diesel, and jet fuel from Houston, Texas to as far north as New York Harbor. Colonial Pipeline briefly curtailed operations and shipped products intermittently in the wake of Hurricane Harvey, before resuming operations at reduced rates of flow on 6 September.

As supplies were disrupted, the East Coast drew down inventories of motor gasoline. East Coast total motor gasoline inventories in the week ending 1 September 2017 fell 3.5% compared to the previous week to 2.2 million bbls. Almost all of this drawdown occurred in the Lower Atlantic region, which stretches from Virginia to Florida.

Disruptions caused by the hurricane also led to higher gasoline prices. The US average regular retail gasoline price increased from US$2.40/gal on 28 August 2017 to US$2.68/gal on 4 September, based on weekly data collected in EIA’s ‘Gasoline and Diesel Fuel Update’.

In the areas affected by the hurricane, gasoline prices rose even more, but they still remained below the national average. Gulf Coast gasoline prices increased by 35 cents per gallon to US$2.51/gal, Texas state average prices rose 40 cents per gallon to US$2.56/gal, and Houston prices rose by 35 cents per gallon to US$2.43/gal from 28 August to 4 September. In each case, these were the largest weekly increases in gasoline prices since Hurricane Katrina in 2005.

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