Disruptions Create Murky Supply Picture

By: Daniel Guttman / February 7, 2019

Across North America, temperature fluctuations, refinery turnarounds, and pipeline disruptions have created supply challenges getting petroleum to market. When refineries shut down for maintenance there is always a potential for a supply shortage in the effected markets, couple that with increased demand due to weather and all of a sudden a long (plenty of product) market becomes a short (scant amounts of product) market.

 Currently, the two main refineries that supply the Laurel Pipeline (PBF & PES) are shut down for maintenance. With cold weather moving in and out of the area, retail chains are seeing large swings in demand for all products. In the Gulf Coast, Exxon’s Beaumont Refinery has 590,000 bpd offline due to issues with the Hydrotreater and Crude Distillation Unit. In the Midwest Marathon’s Catlettsburg Refinery had issues with river deliveries due to the Ohio River being frozen. 

pghcity

 There have also been pipeline disruptions effecting the countries supply picture. According to Reuters, “A part of TransCanada Corp’s Keystone oil pipeline was shut on Wednesday after a possible leak in the St Louis, Missouri, area, according to three sources familiar with the matter…Earlier, energy intelligence provider Genscape reported that flows in the Keystone-to-Steele-City pipeline had decreased to near 41,000 barrels per day from about 622,000 barrels per day.” The Keystone Pipeline brings Canadian crude to the United States to be refined in the Midwestern Refineries.

keystonepipe

Although these supply disruptions are short term, they are creating large price swings for refiners, marketers, retailers, and consumers. It would seem likely that once these product flow issues are resolved, the markets affected will see a reversal in their supply situations. Only time will tell.

 

https://www.reuters.com/article/us-usa-oil-transcanada-keystone/transcanadas-keystone-oil-pipeline-shut-after-possible-leak-near-st-louis-traders-idUSKCN1PW07U

https://www.pghcitypaper.com/Blogh/archives/2018/01/08/pittsburghs-frozen-rivers-will-stick-around-despite-warming-temperatures

https://www.google.com/search?rlz=1C1GCEU_enUS820US821&biw=1536&bih=724&tbm=isch&sa=1&ei=i2BcXK7SCoemjwSP3JK4Cw&q=Keystone+pipeline+images&oq=Keystone+pipeline+images&gs_l=img.3...21229.21229..21683...0.0..0.54.54.1......1....2j1..gws-wiz-img.xY0OBUggeSk#           


Categories: oil refiners, pipeline, Winter


Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.


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