Nearly three million barrels of daily refining capacity have been affected by the blizzard in the U.S; crude production could be affected also, according to Reuters calculations and Wood Mackenzie analysts.
The blizzard that hit Texas on Monday morning continues to create havoc and discomfort in the state, the heartland of U.S. energy industry; and, thus, bringing downstream operations to a halt, as some of the biggest refineries of the state remain offline.
Some of the first refineries to halt production were Motiva Enterprises’ facilities at Port Arthur, Texas. It has a refining capacity of nearly 600,000 barrels per day of crude; it is also the biggest refinery of the country.
Valero Energy, ExxonMobil, Total also stopped operations at their sites in Texas this Monday. In the Corpus Christi area alone, nearly 807,000 barrels per day of crude went offline; while further 1,2 million bpd were out at the Beaumont, Nederland and Port Arthur regions, as reported by Wood Mackenzie.
The energy consultancy firm also reports that 1,3 million, to maybe 1,8 million bpd of capacity went offline in the Houston area, the most affected of the state. Consequently, the fewer supply for refined products could boost prices, as it happened with electricity and gas spot prices earlier.
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With refining capacity hit, prices likely to go up
As we have reported previously, the series of blackouts, spanned by ERCOT in order to control demand, boosted electricity prices nearly 10,000%; hitting a record high of $11,000 per megawatt, when the typical price is of less than $50.
Moreover, Rystad Energy’s VP for oil markets, Paola Rodriguez Masiu, said. “The combination of increasing demand of heating fuels and refinery outages are likely to trigger a spike in prices across the suite of refined products from diesel to propane.”
Indeed, crude oil prices have already spiked to a thirteen-months record high, while gas prices also jumped to a three-month high.
Finally, Rodriguez Masiu concluded: “The new outages will tighten supply for refined fuels as over 3 million barrels of refining capacity have been now hit.”