As prices continue to fall here in the Midwest, the South has not yet forgotten the sting and pain that Hurricane Ike brought, roughly 3 weeks ago. Atlanta, GA is still suffering from periodic gas shortages and high prices. The same is occurring in other locations in the South. Here in Michigan it is relatively quiet with prices falling into the $3.50’s.
On the other side of Michigan, prices have dropped as low as $3.27 in Ypsilanti! Will we see that here, and furthermore, will we see under $3 anytime soon? YOU BET! I am definitely expecting prices to drop below $3 between now and mid-November (BUT… this depends on Hurricane season of course!) We also are looking forward to some refinery expansion projects coming online!
Projects due to be completed soon:
- Sunoco @ Philadelphia, PA (early 2009): Gaining 15,000bpd from a new Fluid Catalytic Cracker unit and 40,000-50,000bpd fro a new HDS
- Sunoco @ Toledo, OH (end 2008): 10,000-15,000bpd expansion
- ConocoPhillips @ Wood River, IL (2009): 135,000bpd, Crude Distillation Unit, Delayed Coker Unit projects
- Holly @ Navajo, NM (Q4, 2008): 20,000bpd expansion
- Motvia @ Port Arthur, TX (2008): 45,000bpd expansion (plus an additional 325,000bpd to be online in 2010!)
- Holly @ Woods Cross, UT (Q4, 2008): 20,000bpd expansion
- Sinclair @ Salt Lake City, UT (2009): 60,000bpd expansion
- Big West Oil @ Bakersfield, CA (2008): 19,200bpd (new Fluid Catalytic Cracker), 25,000bpd (Distillate Hydrotreater), 9,000 (Alkylation unit)… total of 53,200bpd!
- CHS @ Laurel, MT (Aug 08): 15,000bpd expansion
Wow! Going back in time, we’re also at 17,610,000 barrels of daily capacity at U.S. refineries, almost 500,000bpd more than when Katrina hit in 2005, and the highest amount in history!
With slowing demand, I’ll bet some refiners are having second thoughts…
Look for prices to continue to fall!
My brother lives in Atlanta and he says that it is horrible. He drives around on his lunch hour trying to find some place with less than an hour wait. Plus, when you find a station with gas, it is a 10 gallon limit. I guess that the people that have “premium only” cars are pretty much screwed, because none of the stations want to waste a compartment in the delivery truck with premium.
Marathon is also expanding their Garyville, Louisiana refinery by 256,000 bpd (which brings it up to 425,000), which should come online 4th quarter of 2009.
The expansion stats normally get left out of the articles that point out that the US went from over 300 refineries down to 150 and that no new refinery has been built since 1976 (Marathon’s Garyville refinery). But, the refineries that closed were all small unprofitable refineries with no ability to expand. Most of the remaining refineries have doubled their size in the last 40 years.
Its great to see capacity being added to the mix, especially at Toledo…where I have a feeling a lot of Michigans, especially eastern Michigans fuel comes from.
Let me ask this though…how much capacity is being taken off line due to equipment age at any given time? I must assume that with additions also come subtractions.
Second question is this: We get our fuel (west Michigan) for the most part off the Ferrysburg rack. Where does that actually come from? BP in Whiting? And via boat/barge or pipeline? Opps more than one question.
And a follow up on previous comment in another part of your site…I am a railroad conductor in GRR and we sent 8 tank cars of alcohol to Muskegon Wednesday. It came from a plant in the Cincinnatti area. That is an ongoing thing but the alcohol usually comes from Minnesota or southern Illinois. First I’d seen from Cinnci area. Goes to a chem distributor who I thnk unloads for a fuel distributor.
We also get a lot of hot asphalt going to Iko Midwest in Kankakee. Iko is a major shingle/roofing supplier to the midwest. We also get a lot of sulphuric acid going to BP Amoco in Whiting. I’m thinking its all out of northwest Ohio refineries but I’ll check on that.
Fascinating how this circle of products goes round and round isn’t it?