Offline refining capacity outpaces production losses

WTI and ICE Brent futures were slightly up from Monday’ session at 73.3 $/b. Outages in the US refining sector outpaced crude production shut-ins, following Ida’s impact. Indeed, estimates range from 2 to 2.5 mb/d of offline refining capacity in the Louisiana state. On the other side of the market, gasoline and diesel shipments have resumed through the colonial pipeline system on Monday evening, which will limit the refined product inventory builds in the PADD3 area. It is likely that stock draws in gasoline inventories will continue to be sustained, as refiners are still accessing the damages on their refineries, and the power supply is still not 100% back online in the state of Louisiana. 

Looking at Mexico, PEMEX has confirmed that the offshore crude production at KMZ was fully back online as of August the 30th, as expected. In Libya, production has likely started to be disrupted by about 0.25 mb/d, even if the situation remains fluid, as budget issues in the Libyan oil sector continue to be a contentious topic.