US energy prices higher as Storm Elliott knocks out supplies, infrastructure
Quantum Commodity Intelligence - The winter storm blasting across the US has caused closures and disruption to several energy facilities, along with supply chains, and while key oil and gas benchmarks have posted only slim gains in thin post-holiday trade Tuesday the supply disruptions were seen as broadly supportive .
The latest refinery closure resulting from the big freeze was Pemex’s 312,500 bpd Deer Park plant in Texas, operated by Pemex, which was idled late last week and most units at the facility remained shut late Sunday, sources with knowledge of the refinery’s operations told Reuters.
Winter Storm Elliott also forced several plants to suspend operations temporarily in the Houston region late last week, including Motiva Enterprises, Marathon Petroleum and TotalEnergies refineries.
Operations at other Texas refineries operated by ExxonMobil, Valero Energy and LyondellBasell were also disrupted by the severe storm, reported the Houston Chronicle.
However, according to Reuters, refineries were not expecting extended outages, with operations scheduled to resume as soon as the storm passes this week. The giant 607,000 bpd Motiva refinery was said to have already activated restart procedures.
CNBC reported crude oil production in North Dakota was cut by over 300,000 bpd late last week, while natural gas output was also curtailed with disruptions lasting into this week.
Bloomberg said US natural gas output on Monday was approximately 90 billion cubic feet, roughly 10% below normal, according to estimates based on early pipeline schedules.
This was the biggest one-day drop since last February’s Texas freeze, with supplies constrained after wells and pipes froze due to extreme cold.
The storm could also threaten disruptions to LNG exports as freezing temperatures delayed pilot services for the Sabine-Neches Waterway servicing Sabine Pass, as per notices by Moran Shipping, quoted by Bloomberg.
Additionally, pilots have suspended the docking of ships at the port of Corpus Christi in Texas due to the extreme winter weather, Moran Shipping said. As a result, vessel traffic to the LNG export facility at Corpus Christi, Texas, could be impacted.
Disruption to power supplies was also reported across the country, as gas-fired stations were unable to source enough fuel while transmission lines also failed.
Despite widespread outages, benchmark US energy contracts trading on NYMEX were showing only slim gains by late afternoon Eastern time Tuesday, with infrastructure and supply chains set for mostly short-term disruptions.
WTI crude (Feb23) $79.87/b +0.39%
ULSD diesel (Feb23) $3.345/g +3.95%
Rbob gasoline (Feb23) $2.376/g -0.65%
Henry Hub NG (Feb23) $5.209/mmBtu +2.56%