BP refinery outage increases Midwest gasoline prices

The BP refinery in Whiting, Indiana, US, experienced an unplanned outage on 8 August 2015 and was forced to reduced production. The outage was caused by leaking pipes in the largest of the three crude oil distillation units at the refinery, and this has cut the refinery’s total operable crude distillation unit (CDU) capacity by approximately 50%.

The US Energy Information Administration (EIA) has estimated the loss of gasoline production to be between 120 000 bpd and 140 000 bpd. Press reports of the refinery have indicated that it is running at 40% capacity.

Following the outage, the wholesale spot price for gasoline in Chicago, Illinois increased 60¢ per gallon (gal) to US$2.47/gal. This increase in spot prices has led to higher retail gasoline prices throughout the region: on 17 August 2015, regular retail gasoline prices in the Midwest increased 32¢/gal from the previous week to US$2.79/gal.

The upper Midwest is supplied predominantly by in-region refinery production, with additional supplies arriving by an extensive pipeline and inland river system connecting the different Midwest markets to each other and to the Gulf Coast. Until those supplies arrive, the Midwest is likely to draw down inventories of motor gasoline, which were 47.5 million bbl for the week ending 7 August 2015, approximately 1.5 million bbl below the five-year average inventory level. Additional refinery outages, planned or unplanned, will require further adjustments to the supply chain.

Edited from press release by Angharad Lock

Read the article online at: https://www.hydrocarbonengineering.com/refining/18082015/bp-refinery-outage-increases-midwest-gasoline-prices-1281/