Release date: November 16, 2016  |  Next release date: November 23, 2016

Planned refinery outages through year-end not expected to constrain availability of transportation fuels

A recently released report by the U.S. Energy Information Administration (EIA) finds that planned refinery maintenance is not expected to affect adversely the supply of gasoline, jet fuel, and distillate fuel in the United States through the end of 2016. Refinery outages result from both the planned shutdown of refinery units for maintenance and upgrades, and from unplanned shutdowns from a variety of causes such as mechanical failure, bad weather, power failures, fire, and flooding. Planned maintenance is typically scheduled when refined petroleum product consumption is relatively low.

The effect of planned refinery outages on product supplies depends on many factors, including the magnitude and duration of the outage, petroleum product demand, the availability of product supplies from other available refinery capacity and imports, and product inventories. Barring unusually high unplanned outages, planned outages that extend beyond schedule, or higher-than-expected demand, the supply of gasoline, jet fuel, and distillate fuel is expected to be adequate in all regions through December 2016.

The report considers planned shutdowns of refinery units as reported by Industrial Info Resources (IIR) and provides EIA's analysis of the implications of outages affecting atmospheric crude distillation units (ACDU), fluidized catalytic cracking units (FCCU), catalytic reforming units (CRU), hydrocracking units (HU), and coking units (CU).

As in previous EIA analyses of refinery outages, the latest report considers the supply of petroleum products on regional (both Petroleum Administration for Defense District (PADD) and sub-PADD) levels, rather than at a national level. National balances provide very limited insight into the adequacy of supply because pipeline infrastructure, geography, and marine shipping regulations constrain the amount of product that can flow among the different regions of the United States.

Fall planned maintenance along the East Coast (PADD 1) is expected to be very light for atmospheric crude distillation, fluidized catalytic cracking, and reforming capacity. Planned outages were estimated to cause production loss in gasoline of 21,000 barrels per day (b/d) and 44,000 b/d in September and October, respectively, and production loss in distillate fuel of 6,000 b/d and 11,000 b/d during the same months. Planned outages are also expected to reduce gasoline supplies by 12,000 b/d in November. There are no outages planned for December. Total estimated production losses resulting from the expected outages account for only 3.5% of existing gasoline inventories, and 1.0% of distillate inventories as of August 26, 2016. Therefore the production loss in PADD 1 could readily be covered by existing product inventory.

Planned maintenance in the Midwest (PADD 2) is concentrated in September and October, although planned atmospheric crude distillation unit outages are less than the historic ten-year average. Planned maintenance of fluidized catalyst cracking capacity is above the 10-year average from September through November, with 11% and 16% of capacity offline in September and October, respectively, compared with an historical average of 5% and 10% during those months. The outages result in moderate production loss of petroleum products, peaking at 130,000 b/d in October, including 65,000 b/d of gasoline, 43,000 b/d of diesel fuel, and 22,000 b/d of jet fuel. The total estimated production losses in gasoline, distillate fuel, and jet fuel account for 8%, 9%, and 20%, respectively, of existing regional inventories as of August 26. Nevertheless, regional inventories are likely sufficient to make up for lost in-region production and significant supplies are available from other regions, such as the Gulf Coast, to offset production shortfalls from planned outages as conditions warrant.

Planned maintenance along the Gulf Coast (PADD 3) of fluidized catalytic cracking, reforming, hydrocracking, and coking units is above average this fall, while planned atmospheric crude distillation unit maintenance is near or below the 10-year average. The outages result in moderate production loss in petroleum products. During September and October, the estimated average losses are 127,000 b/d in gasoline, 33,000 b/d in jet fuel, and 91,000 b/d in distillate fuel. As of August 26, Gulf Coast gasoline inventories were at their highest point in over 10 years, and jet fuel and distillate fuel inventories were above the 10-year average. The total estimated production loss as a result of the planned outages accounts for 10% of existing gasoline inventories, 14% of jet fuel inventories, and 15% of distillate inventories. As a result, regional stocks are judged to be sufficient to offset lost production from the planned outages.

Planned outages in the Rocky Mountain region (PADD 4) this fall are limited to only fluidized catalytic cracking units, with 28,000 b/d (14% of regional capacity) offline in October and 6,000 b/d (3% of regional capacity) offline in November. During peak planned outages in October, maintenance is estimated to reduce gasoline production by 21,000 b/d, jet fuel by 5,000 b/d, and distillate by more than 4,000 b/d. Total estimated production losses from planned outages in PADD 4 in October and November account for 12% of regional gasoline inventories, 26% of jet fuel inventories, and 5% of distillate inventories. While October fluidized catalytic cracking maintenance is above average, the limited nature of maintenance, adequate product inventory levels that are close to the 10-year average, seasonally lower consumption, and above average inventories in neighboring regions, indicates sufficient supply to offset planned production outages.

Along the West Coast (PADD 5), planned outages between October and November are above the 10-year average, while there is no maintenance planned for September or December. Maintenance is concentrated among atmospheric crude distillation units, with outages averaging 423,000 b/d (15% of regional capacity) in October and November, sharply higher than the 10-year average of 78,000 b/d (3% of regional capacity). Coking maintenance averages 50,000 b/d (9% of regional capacity) in October and November, above the 10-year average of 19,000 b/d (4%). Below average reforming maintenance only occurs in October and there is no planned maintenance for fluidized catalytic cracking and hydrocracking units.

U.S. average regular gasoline and diesel retail prices fall

The U.S. average regular gasoline retail price dropped five cents from the previous week to $2.18 per gallon on November 14, up one cent from the same time last year. The Midwest price fell nine cents to $1.99 per gallon, the West Coast and Gulf Coast each fell four cents to $2.65 per gallon and $1.98 per gallon, respectively, the Rocky Mountain price dropped three cents to $2.24 per gallon, and the East Coast price fell two cents to $2.22 per gallon.

The U.S. average diesel fuel price dropped three cents to $2.44 per gallon, down four cents from the same time last year. The Rocky Mountain and Midwest prices each fell four cents to $2.49 per gallon and $2.39 per gallon, respectively, while the East Coast and Gulf Coast prices each fell two cents to $2.45 per gallon and $2.32 per gallon, respectively. The West Coast price dropped one cent to $2.76 per gallon.

Propane inventories gain

U.S. propane stocks increased by 1.2 million barrels last week to 100.8 million barrels as of November 11, 2016, 3.6 million barrels (3.5%) lower than a year ago. Gulf Coast, East Coast, and Rocky Mountain/West Coast inventories increased by 1.2 million barrels, 0.2 million barrels, and 0.1 million barrels, respectively, while Midwest inventories decreased by 0.4 million barrels. Propylene non-fuel-use inventories represented 3.8% of total propane inventories.

Residential heating fuel prices decrease

As of November 14, 2016, residential heating oil prices averaged almost $2.38 per gallon, one cent per gallon less than last week and two cents per gallon less than last year at this time. The average wholesale heating oil price is $1.47 per gallon, three cents per gallon less than last week but one cent per gallon more than a year ago.

Residential propane prices averaged nearly $2.05 per gallon, almost two cents per gallon less than last week and 11 cents per gallon more than one year ago. Wholesale propane prices averaged nearly $ 0.63 per gallon, three cents per gallon lower than last week but almost 14 cents per gallon more than last year’s price.

For questions about This Week in Petroleum, contact the Petroleum Markets Team at 202-586-4522.

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Retail prices (dollars per gallon)

	Retail prices	Change from last
	11/14/16	Week	Year
Gasoline	2.184	-0.049	0.006
Diesel	2.443	-0.027	-0.039
Heating Oil	2.375	-0.011	-0.023
Propane	2.048	-0.016	0.110

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Futures prices (dollars per gallon*)

	Futures prices	Change from last
	11/10/16	Week	Year
Crude oil	44.66	0.59	3.92
Gasoline	1.338	-0.041	0.099
Heating oil	1.437	0.007	0.056
*Note: Crude oil price in dollars per barrel.
Markets were closed on 11/11/2016.

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Stocks (million barrels)

	Stocks	Change from last
	11/11/16	Week	Year
Crude oil	490.3	5.3	35.2
Gasoline	221.7	0.7	7.5
Distillate	148.9	0.3	8.6
Propane	100.827	1.227	-3.642