In scenario 1 we assume no lasting damage, with only negligible corrective maintenance work and thereby a V-shaped recovery in throughput.
But considering the likelihood of some repair work in the next two weeks, we may also see throughput stay below the 14 million b/d mark for the very near term (scenario 2).
Refining margins on the USGC have already reacted positively to this unexpected support, especially complex margins which more than doubled vs last week and which recorded the highest reading since April. But gasoline stocks in in the US may not draw significantly outside of PADD-3, as we expect offline refining capacity to return rather quickly.
Research Highlights - Week 7
A severe cold snap starting at the beginning of last week in Texas and in the surrounding area has now idled a vast chunk of PADD-3 refining capacity. Our estimates suggest that this cold spell could result in peak offline capacity of almost 6 million b/ d (see Americas Weekly – Issue 07).