It is now a little over a month after Hurricane Harvey made landfall on the US Gulf Coast. While some refineries are still in the process of ramping up activities, refining utilization is clambering back higher towards historical norms. This improvement is being reflected through in higher crude and product flows, with product export activity looking particularly elasticated, snapping back close to whence it once was.
The EIA reported yesterday refinery runs on the U.S. Gulf Coast last week rebounded to 8.15 million barrels per day, back in line with the five-year median. This is a rebound of over 2.4 million bpd from just two weeks ago, and further upside lies ahead in the coming weeks as refineries return to full strength, and strong crack spreads (aka profitability) encourage refiners to run as hard as they can, deferring maintenance where possible.
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This rebound in refining activity is reflected through in crude import volumes. After dropping to just 111,000 bpd in the week that Harvey made landfall, crude imports into Texas ports rebounded to over 1.1 million bpd last week. Conversely, Louisiana ports discharged 1.54 million bpd in the week following Harvey's landfall - a 16-week high - as cargoes were diverted away from the storm.
U.S. Gulf middle distillate exports also experienced a significant drop in the week of Harvey's landfall, although loadings from both New Orleans and Pascagoula meant that exports held above 400,000 bpd. Export loadings have since rebounded, averaging about 950,000 bpd over the last three weeks.
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This strong recovery means that deliveries to key recipients of US Gulf Coast middle distillates have remained fairly well-supplied. Our ClipperData show we saw a dip in deliveries to Latin American destinations in the week before last (reflective of lower loadings in the week of Harvey's landfall) but receipts have since rebounded, and should continue to do so in the weeks ahead.
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As for gasoline exports, they have followed a similar trajectory to middle distillates. US Gulf Coast exports have rebounded back above 1 million bpd last week, after dropping to below 200,000 bpd in the week of Harvey's landfall. Again, the proximity of the leading customer for US Gulf Coast gasoline exports, Latin America, means that the supply disruption has passed nearly as quickly as the storm. Hark, USG gasoline export snapback:
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By Matt Smith
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Probably should expect a relatively flat maintenance season, especially with so much ground to make up with products, especially distillates heading into a cold winter.