Market Assessment of Refinery Outages Planned for October 2009 through January 2010 |
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Market Assessment of Refinery Outages Planned for October 2009 through January 2010
The second refinery outage report for 2009 summarizes planned refinery outages through January and looks at the ability of remaining capacity to meet forecast demand. As required under Section 804 of the Energy Independence and Security Act of 2007 (Pub. L. 110-140), the Market Assessment of Refinery Outages Planned for October 2009 through January 2010 reviews the supply implications of refinery outages planned for October 2009 through January 2010, which covers the seasonal increase in heating oil demand. Refinery outages are the result of both planned maintenance and unplanned outages. Maintenance is usually scheduled during the times when demand is lowest – in the first quarter and again in the fall. Unplanned outages can occur at any time and for many reasons such as mechanical failure, fire, or flood. Nationally, capacity net of outages should be adequate to meet projected demand October through January. This assessment includes the impacts of the indefinite idling of Sunoco’s 150,000-barrel-per-day Eagle Point Refinery in New Jersey. Available refinery crude distillation capacity could run about 2 million barrels per day more than is projected to be needed. This implies that at least 10 percent of available capacity may not be needed. Likewise, available catalytic cracker capacity will be about 10 percent greater than projected U.S. feed input to catalytic crackers. The surplus available capacity results from reduction in refinery petroleum fuel demand stemming mainly from the recession and from increased use of ethanol in gasoline. In summary, refinery outages are not expected to interfere with meeting the demand expected for October 2009 through January 2010 and should not create any significant price increases. This conclusion is based on the combined outlook for planned and typical unplanned outages, weak product demand, widely available imports, and ample U.S. gasoline and distillate stocks. |