Unplanned refinery outages and lower gasoline production capacity are increasing the costs of producing summer-grade gasoline in the US this summer, resulting in both higher US crack spreads and retail gasoline prices.
The crack spread, the difference between petroleum product prices and crude oil prices, is an indicator of underlying trends in refining, and it usually makes up about 25% of the retail gasoline price. During the summer of 2023, US gasoline crack spreads had remained less than those of summer 2022, up until the final weeks of July and into August. Although US gasoline consumption has increased from last summer and inventories remain near five-year lows, recent developments in US refining activity are primarily driving crack spreads this summer.
Several unplanned refinery outages have prevented refiners from producing enough high-octane blendstock to meet summer demand. Many of the outages have occurred at secondary conversion units, including fluid catalytic cracker (FCC) units, reforming units, and alkylation units.
Some notable outages in 2023 have included Phillips 66’s Bayway New Jersey refinery, which reported an outage to its FCC unit, the largest FCC in the East Coast (PADD 1), which lasted until late July. In late July, ExxonMobil also reported an outage at one of its two FCC units at its Baton Rouge, Louisiana refinery, which lasted through August 6.
The secondary-unit outages mean refineries needs to reduce crude oil and unfinished oil inputs, which the EIA surveys in its Weekly Petroleum Status Report.
Read the article online at: https://www.hydrocarbonengineering.com/refining/24082023/eia-refinery-outages-amid-lower-capacity-increase-us-gasoline-crack-spreads/
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