The beginning of the fall refinery turnaround season is officially upon us. Overall U.S. crude runs fell 253,000 barrels per day (BBL/d) due to an increase in refinery turnarounds of over 400,000 BBL/d. U.S. crude distillation unit (CDU) turnarounds will increase for another two weeks before hitting a peak, so further reductions in crude throughput should be expected into mid-October.


The bulk of this week’s increase in CDU turnarounds came in PADD 3, where Valero’s 268,000-BBL/d CDU in Port Arthur, Texas, began seven weeks of planned maintenance. Elsewhere in PADD 3, Phillips 66’s Sweeny refinery in Texas remains offline for unplanned reasons that began during the week that ended September 9. The coming weeks will see new planned turnaround activity at Marathon’s Garyville, Louisiana, refinery and ExxonMobil’s Baytown refinery in Texas. Along with Port Arthur, these outages will bring CDU outages above 700,000 BBL/d, which is above last year’s level, but in line with the five-year average.


Regarding unplanned activity in PADD 3, it is prudent to point out that we are still in the midst of the hurricane season. Just this morning, Hurricane Matthew strengthened into a Category 3 storm. At this point, the models show heavy rain in the Caribbean before Matthew takes a sharp right and heads offshore up the Atlantic coast. While this hurricane is unlikely to affect petroleum assets in the Gulf of Mexico, it’s a reminder that storms aren’t behind us yet.


PADD 2 saw a modest increase in turnaround activity of more than 100,000 BBL/d during the week. The main driver of CDU turnaround activity in the Midwest continues to be the slowdown at BP’s Whiting refinery that will last another two weeks. After that, though, it is mostly smooth sailing for PADD 2 as this year’s fall turnaround season is expected to come in well below the historical average.


The other major impact that will be felt this fall comes from the West Coast. During the week of October 7, two significant crude units--Chevron’s Richmond, California, refinery (240,000 BBL/d), and Phillips 66’s 133,000-BBL/d refinery in Carson, California--will shut down. Looking at the PADD 5 crude inventory, it could be assumed that stock levels have actively managed to prevent oversupply in anticipation of these two refinery outages.


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