Refined Products Ease As Markets Drift Into A Holiday Pause

Refined products are ticking modestly lower Friday with RBOB gasoline down around $.0150/gallon and ULSD down just over a penny approaching 8am central. If gasoline prices settle lower today, it will snap a 6 session winning streak that added a whopping 6 cents to prompt values.

Spot markets in the U.S. aren’t being assessed by any of the big 3 price reporting agencies, so most traders and brokers are taking the day off, and rack prices are set to carry over from Wednesday night’s settlement unless something major happens with futures today.

Ukraine launched UK-supplied Storm Shadow missiles at a Russian seaport and refinery Thursday. The 112mb/day Novoshakhtinsk refinery was reportedly hit in the strikes. That facility was already operating below capacity from repeated drone strikes over the past 2 years, but the increased payload from the missiles compared to the drones used suggests the damage done in the latest attack may be more extensive.

The U.S. military bombed targets in another OPEC nation, with ISIS factions in Nigeria struck Thursday. Those strikes occurred far from the oil producing Niger delta, and were reportedly done with the government’s blessing, so they shouldn’t have any direct impact on supply or prices.

PBF reported a week’s worth of planned flaring upcoming at its 160mb/day Torrance CA refinery Wednesday night. That maintenance is set to start tomorrow and run through January 3rd. Los Angeles basis values had already been rallying as Marathon’s LA-area refining complex is undergoing work after multiple upsets the week prior, helping differentials recover from their lowest levels of the year.

The 340mb/day Pemex refinery in Deer Park TX reported an upset in a coker unit Wednesday that lasted 8 hours, due to a power blip.

There were also multiple upsets reported at the Freeport and Corpus Christi LNG export facilities the past few days, but so far natural gas futures seem unphased by that news and are ticking modestly higher on the day.

The U.S. gave Serbia 3 more months to negotiate a sale of its only oil refinery to a non-sanctioned entity, offering a lifeline to the facility to find a way to continue operating.

India’s largest refinery is resuming purchases of Russian oil according to a Bloomberg note after a brief pause during the latest round of sanctions, presumably at even lower discounts than they had been receiving as one of the only major buyers left for that supply.