We previously reported on the projected market effects of last week’s devastating flooding in Texas as well as the wider Gulf of Mexico. Hurricane Harvey was a major hit to PADD 3, the United States’ major petroleum refining heartland, and this posed major problems for refined product retailers and consumers in major consumption regions. Particularly newsworthy was the storm’s effects on the gasoline markets on the US Eastern Seaboard; traders were uncertain about the region’s gasoline supplies and their ability to cope with not only supply-side shutdowns but also a demand-side surge as families across the US were preparing to hit the highways for the Labour Day weekend. Navarik Data can confirm that our earlier prediction that the markets would be able to generally balance these disruptions with a temporary mix of supply diversions and price increases has held, at least for marine movements.
For instance, overall barrel per day (bpd) equivalent estimates for gasoline & gasoline component inflows into PADD 1 are down by approximately 38.9%, or approximately 340,000 bpd (Note that the bpd equivalent measure is an estimate that adjusts for the fact that nominations are spread out over a long time frame and may not include activities nominated much closer to the activity date.) This is because inflows from PADD 3 are meanwhile down by 59.6%, with only some of this decline met by a 26.1% increase in volumes flowing in from alternative sources like Northwest Europe. The difference should therefore be attributed to declining demand as consumers in coastal-supplied regions respond to the higher prices, or increased overland supplies in inland regions.
With the market generally betting on refinery shutdowns being temporary and damage to the PADD 3 refining system being marginal – a view Navarik Data supports – how long these shifts in marine supplies to the East Coast continue is a pressing concern. Navarik Data is uniquely placed to advise on if and/or when the situation normalizes.
Navarik’s team of analysts provide highlights gathered from the Navarik suite of reports. This highly validated set of data provides unique insight into the marine petroleum shipping market.
To reach a Navarik Oil & Gas analyst email email@example.com.
A list of current available trade flow reports can be found here.