For all last week, those companies with access to Gulf Coast pricing and customers in the Group 3 have had the ability to take advantage of the tremendous price difference. Early in the week we were seeing price differentials off RFG87 to 87E10 of up to .30/gallon. Towards the end of the week that spread dropped lower to about .15/gallon, but still - for anyone with sites/customers in central - southern Oklahoma that drive from Dallas/Aledo/Euless/Ft. Worth makes sense. There are, however, some potential issues with this option coming soon.....
Late Friday evening Coffeyville Resources (CVR) Wynnewood Refinery exploded killing one and injuring another. I was able to speak with a representative from Coffeyville on the expected supply disruptions and he stated the terminal was already in turn around so disruptions should be non-existent. We did hear of a possible issue regarding the Alon Big Springs Refinery. A couple sources have told us they are currently out of ULSD and are expected to be out of Gas by Tuesday and not back up until 10/8. With product being out (in the Magellan system) from Houston to Odessa, there were a number of people heading out to this area to pick up their product. We were able to confirm Magellan had product back in as of yesterday, but still, this outage could have negative implications. If Big Springs is down until 10/8 there is a very good chance the mountain region supply is going to come from Houston/San Antonio to make up for this loss. Moving more product out of Houston/San Antonio will decrease supply and likely close this Group 3/Gulf Coast gap we're benefiting from right now.
I have yet to get a clear answer from a representative from Alon on whether or not these supply issues are 100% accurate or not, but from the associates this news was received I'm fairly confident these are real issues and we'll see the ramifications occur this week.
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