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Early spring and winter traditionally are heavy periods for U.S.
refinery maintenance. But refiners are planning more upgrades
than usual in the first half of 2019 to avoid fall and winter
shutdowns as they prepare to meet coming low-sulfur standards.
This year's maintenance schedule and higher crude prices helped
push U.S. gasoline prices to a national average of $2.83 a
gallon last week, up 26 percent since the start of the year,
according to data from the American Automobile Association. U.S.
crude futures rose 32 percent in the first quarter.
International Maritime Organization (IMO) 2020 is a standard for
maritime diesel that takes effect on Jan. 1 and is designed to
reduce air pollution. Refiners have been revamping their plants
to make IMO 2020 compliant fuel.
"They will push (winter) turnarounds later into 2020 to take
advantage of that margin bump from the switch to IMO 2020," said
Susan Bell, a senior associate at energy consultancy IHS Markit.
Most U.S. refiners typically ramp up production of motor fuel
during the second quarter to build inventories for the summer
driving season. But Bell said an average of 1 million barrels
per day (bpd) of crude oil refining capacity could be offline
through the second quarter.
Work on refiners' crude distillation units (CDUs) and catalytic
crackers helped send volumes down to 15.85 million bpd in the
last week of March, from 17.5 million bpd in the first week of
January, the EIA said. CDUs generate feedstocks for fuel
processing units such as catalytic crackers.
Among the refiners scheduling major maintenance this month are
Valero Energy Corp and BP Plc. Valero's Memphis, Tennessee,
refinery will shut its 65,000 bpd gasoline producing fluidic
catalytic cracking unit for a 60-day overhaul the last week of
April.
BP is shutting one of two small CDUs at its 413,500 bpd Whiting,
Indiana, refinery on Monday for 30 days of work. The Whiting
refinery is BP's largest in North America.
Work also is continuing this month on a planned overhaul of the
112,000 bpd gasoline-producing residual catalytic cracking unit
at Royal Dutch Shell Plc's 218,200 bpd Norco, Louisiana,
refinery. That unit is expected to restart in the first full
week of May.
Two other major overhauls finished during the switchover between
the quarters.
Exxon Mobil Corp recently finished CDU overhauls at two plants:
its 560,500 bpd Baytown, Texas, refinery wrapped up work on its
largest CDU in late March and the company's 502,500 bpd Baton
Rouge, Louisiana, refinery restarted its second-largest crude
unit on Monday.
(Reporting by Erwin Seba, Editing by Rosalba O'Brien)
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