Note: Excerpted from the Energy Information Administration’s (EIA’s) This Week in Petroleum report.
As of January 1, 2017, U.S. operable atmospheric crude distillation capacity reached 18.6 million barrels per calendar day (b/cd), 1.6% higher than at the beginning of 2016 according to EIA’s recently released annual Refinery Capacity Report. This increase in operable capacity was the second largest since the 2.9% increase from January 2012 – January 2013, which reflected the restart of East Coast refineries that had closed in 2011 (Figure 1).
The capacities of secondary units that support heavy crude processing and production of ultra-low-sulfur diesel (ULSD) and gasoline, including thermal cracking (coking), catalytic hydrocracking and hydrotreating/desulfurization also increased. Catalytic hydrocracking and deasphalting units experienced the largest capacity increases over the past year, rising by 4.5% and 6.1%, respectively.
EIA’s Refinery Capacity Report measures refinery capacity in b/cd and barrels per stream day (b/sd). Calendar day capacity is a measure of the amount of input that a distillation unit can process in a 24-hour period under usual operating conditions, taking into account both planned and unplanned maintenance. Stream day capacity is the maximum number of barrels of input that a distillation facility can process within a 24-hour period when running at full capacity under optimal crude and product slate conditions with no allowance for downtime. Stream day capacity is typically 6% higher than calendar day capacity.
The refinery capacity reported for the start of 2017 includes one new unit, the Magellan Midstream Partners LP 42,500 b/cd condensate splitter in Corpus Christi, Texas. Condensate splitters are distillation units that process condensate, which is lighter than crude oil. Splitter capacity is included as atmospheric distillation units in EIA data. The Magellan Midstream Partners LP unit, which began operating in 2017, was operable but not running at the start of the year, so its capacity was listed as idle in the Refinery Capacity Report.
Gross inputs to refineries, also referred to as refinery runs, averaged 16.5 million barrels per day (b/d) in 2016, the highest level ever, 84,000 b/d above the 2015 level and 1.1 million b/d higher than in 2012 (Figure 2). U.S. crude oil production decreased by 0.5 million b/d in 2016 compared with 2015, the first decline since 2008. To offset the decline in production, net imports of crude oil increased by a similar amount. Despite the increase in refinery runs, capacity increased even more, lowering refinery utilization in 2016 compared with 2015.
U.S. Regular Gasoline Retail Prices Fall, Diesel Retail Prices Climb
The U.S. average regular gasoline retail price fell 3 cents from the previous week to $2.26 per gallon on July 3, down 3 cents from the same time last year. The Gulf Coast price fell nearly 5 cents to $2.01 per gallon, the Rocky Mountain price fell 4 cents to $2.35 per gallon, the Midwest price fell 3 cents to $2.14 per gallon, the East Coast price fell over 2 cents to $2.20 per gallon and the West Coast price fell 1 cent to $2.82 per gallon.
The U.S. average diesel fuel price rose nearly 1 cent, remaining at $2.47 per gallon on July 3, 5 cents higher than a year ago. The Midwest price rose nearly 2 cents to $2.40 per gallon, the East Coast price rose nearly 1 cent, remaining at $2.52 per gallon, and the West Coast and Gulf Coast prices remained rose less than 1 cent, remaining at $2.76 per gallon and $2.31 per gallon, respectively. The Rocky Mountain price fell nearly 1 cent, remaining at $2.59 per gallon.
Propane Inventories Gain
U.S. propane stocks increased by 2.1 million barrels last week to 60.6 million barrels as of June 30, 2017, 24.2 million barrels (28.6%) lower than a year ago. Gulf Coast and Midwest inventories increased by 1.4 million barrels and 0.7 million barrels, respectively, while East Coast and Rocky Mountain/West Coast inventories remained essentially unchanged, with a marginal increase and decrease, respectively. Propylene non-fuel-use inventories represented 4.8% of total propane inventories.