Does the US East Coast face a flood of refined products imports?
During the third quarter of 2010, US refining industry performance declined, relative to the prior quarter, said Baker & O’Brien in a recently released report. This decline was evidenced by lower overall industry crack spreads, combine with a narrowing of the light-heavy crude oil price differential (LLS-Maya). Even the closing of several refineries, combined with seasonal maintenance turnaround activity, did not improve performance. The overall decline between 2010’s second and third quarters follows a trend highlighted in Baker & O'Brien's last release - a reduction in crack spreads, beginning in May of this year.
October 2010 indicates performance continuing at levels very similar to those seen during the third quarter.
Baker & O'Brien, Inc.’s third quarter 2010 release to PRISM1 subscribers indicates that overall 2010 margins are higher than last year, with US third quarter 2010 cash margins improving in every district, except for the East Coast (PADD 1). However, when compared against the previous quarter, refinery cash margins have fallen, on average, by over $1 per barrel, with PADD 1 suffering the greatest drop in cash margin. Results varied throughout the country, with results on the West Coast (PADD 5) showing the strongest performance with improvements of nearly $1 per barrel.
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