Issue 109 – Marathon Petroleum Refinery In Houston
Introduction...Wednesday night the reports came out that Texas would have gasoline shortage. Thursday the lines started forming at the gas stations. I needed gas, but decided to wait until Friday when the lines would be gone. Well, the lines were gone, but so was the gasoline. I went to a dozen stations before i found a Walmart that had gas. The station was hidden behind a retaining wall, so the motorists emptied the Racetrac across the street.
By Sunday, I saw several of these gas stations were refueled and selling again.
What happened? After rising 25% last month, gasoline prices fell for first time in two weeks as impact of Hurricane Harvey impact assessed. Some Texas Gulf refineries have opened Saturday including Exxon Mobil 560,500 barrel per day (bpd) Baytown facility, the second largest oil refinery. Several others are preparing to restart its refineries this week include Citgo Petroleum 157,500 bpd refinery in Corpus Christi, Texas. Phillips 66 is preparing to resume operations at its 247,000 bpd facility in Baytown, Texas.
Another positive change for the oil industry is Occidental Petroleum has re-opened its Ingleside, Texas which is a key export hub for Permian Basin oil producers.
About 4.4 million barrels a day of U.S. refining remains closed. The Strategic Petroleum Reserve will supply 1 million barrels of crude to the Gulf Coast plant.
Saturday, the volume of offshore U.S. Gulf of Mexico crude production still shut in declined to about 160,000 bpd.
Nearly half of U.S. refining capacity is located in the Gulf Coast region located near crude oil supplies from Texas oil fields. Most major Texas ports remained closed to large vessels, limiting offloading imported crude.
In summary…While the Hurricane Harvey’s impact on Houston and the Gulf Coast has been horrific, the Texas oil production and crude refining facilities are being restored at a rapid pace.