Ukraine Continues Hammering Russian Refineries, EIA Highlights US Improving Refining Margins

It’s a mixed start for refined products Tuesday with RBOB gasoline down around 1.5 cents while ULSD ticks up by a penny. It’s a small role reversal for refined products after RBOB outperformed ULSD the past 2 sessions.

Chevron reported more unplanned flaring at its El Segundo refinery overnight as the company works to restore service to units that were shut down but not damaged by last week’s fire. Basis values in the region remain elevated but seem to have lost their upward momentum as it appears the damage from this fire will be contained and the facility will continue operating.

The EIA Monday highlighted improving refining margins in the U.S. during the 3rd quarter after a tough first half of the year. Stable oil prices and the attacks on Russia’s refineries were both noted for the improvement, which was echoed by Exxon in an SEC filing predicting a boost in earnings of $300-$700 million during the quarter due to stronger margins.

On the flip side of that coin, margins for renewable fuels have remained very weak, and Shell has announced it will take a $600 million write down after it scrapped its plans to build a biofuel complex in Rotterdam. Speaking of which, the IEA has slashed its Renewable Energy production forecast for the next 5 years, primarily due to regulatory changes in the U.S. and China.

The NHC is tracking two storm systems this morning in the Atlantic basin. The first is given 90% odds of being named but is forecast to stay offshore as it moves north. The 2nd is given just 10% odds of developing in the Bay of Campeche.

ONEOK reported a fire at its Mont Belvieu Natural Gas Liquid fractionation complex Monday, while other media reports suggested it was a (nonexistent) oil refinery that caught fire.

Ukraine’s drones continued hammering away at Russia’s refining network overnight, this time hitting a 180mb/day facility roughly 1,300 miles from the border.