Baltimore bridge collapse to raise retail fuel prices
The collapse of the Francis Scott Key Bridge in Baltimore, Maryland, is more likely to increase regional gasoline prices than diesel due to additional freight costs and certain route restrictions.
Suppliers in the region have so far signaled that the effect on broader markets will be minimal, but regional prices will likely rise, especially as peak summer demand season begins with Memorial Day weekend in late May.
The bridge closure could pose more problems for gasoline supply than diesel, since gasoline cannot be transported through the Fort McHenry (I-95) and Baltimore Harbor (I-895) tunnels — the two other major roads that cross the Patapsco River at Baltimore — while there are no restrictions on diesel, according to the Maryland Transportation Authority (MTA).
Fuel wholesaler Global Partners said yesterday that it would like to see hours of service waivers for trucking in the region to minimize fuel supply disruption to customers, but the Federal Motor Carrier Safety Administration (FMCSA) is yet to issue one.
Elevated retail prices are likely to be limited to the immediate Baltimore area but could spill over into neighboring markets should trucking markets remain tight due to rerouting, market sources told Argus.
Fuel markets in eastern Maryland can be supplied by PBF's 171,000 b/d Delaware City, Delaware, refinery and two further plants in Pennsylvania — Monroe Energy's 190,000 b/d Trainer refinery and PBF's 160,000 b/d Paulsboro refinery.
To the north, United Refining runs a 65,000 b/d plant in Warren, Pennsylvania, and along the Atlantic coast Phillips 66 operates the 259,000 b/d Bayway refinery in Linden, New Jersey.
PBF, Monroe and United did not immediately respond to a request for comment on whether the bridge collapse is affecting refinery operations. Phillips 66 declined to comment on commercial activities.
Still, the five nearby refineries — representing all the Atlantic coast's 850,000 b/d of crude processing capacity — are unlikely to see their operations curtailed by limits in shipping products to Maryland.
With no refinery in the state of Maryland, most fuels are delivered to Baltimore by Gulf coast refiners on the Colonial Pipeline.
Global Partners, which operates a terminal just west of the collapsed bridge, said yesterday it is primarily supplied by the pipeline and expects product flows to continue.
Several terminals in the Baltimore Harbor and the nearby Port Salisbury can also receive small vessels and barges of road fuels from Delaware and Pennsylvania, according to the Maryland Energy Administration (MEA).
The Port of Baltimore — which remains closed since the collapse — took delivery of 24,000 b/d of gasoline and under 2,000 b/d of distillates from barges and small vessels in 2019, about three percent of the Atlantic coast's refining capacity.
"A closure of the Port of Baltimore while the Colonial Pipeline is open would not significantly disrupt fuel supply," the MEA wrote in a 2022 analysis of liquid fuels supply in the state.
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Brazil narrows lower biofuel mix mandate in south
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Mexican power outages enter fourth day
Mexican power outages enter fourth day
Mexico City, 10 May (Argus) — Mexican power grid operator Cenace issued its fourth consecutive day of operating alerts amid the heatwave gripping the country. Net electricity demand reached 47,321MW early today, with deployed electricity capacity slightly below at 47,233 MW, according to Cenace. Since 7 May, Cenace has declared emergency operating alerts as demand exceeded generation capacity during peak evening hours, prompting the grid operator to preemptively cut electricity supply across different states to maintain grid integrity. Power outages have lasted up to several hours in Mexico City and in major industrial states as power demand has outstripped supply by up to 1,000MW. Peak demand this week hit 49,000MW, just below last year's historic peak of 53,000MW during atypical temperatures in June. "We are very concerned about the unprecedented outages detected across 21 states, a situation that affects the normal functioning of Mexican companies," national business chamber Coparmex said. Peak electricity demand typically rises in June-July but temperatures this week have risen as high as 48°C (118° F) across some states. Mexico City reported a record high of 34.3°C on 9 May and high temperatures are forecast to continue into next week, Mexico's national weather service said. The inability of Mexico's grid to respond to increased demand is because of insufficient power generation capacity, non-profit think-tank the Mexican institute for competitiveness (Imco) said this week. "Despite the energy ministry's forecast that 22,000MW of new power capacity would enter service by 2026, only 1,483MW had entered service as of 2022" since late 2018, Imco said. President Andres Manuel Lopez Obrador's administration pledged to build new generation capacity, including five gas-fired, combined-cycle plants, but recognized this week that delays had contributed to the power outages. "We have an electricity generation deficit because some of the combined-cycle plants were delayed, but we are working on it and it will soon be resolved," Lopez Obrador said on 9 May. Lopez Obrador's government has also curtailed private sector power development during his administration. Mexico needs to upgrade and expand its transmission network, industry associations say. "In order to resolve this problem, we believe that a reopening of the electricity market to the private sector is imperative," Mexico's wind energy association, Amdee, said. Mexico has 87,130MW of installed capacity, with 39.5pc from combined-cycle gas-fired power plants and 31pc in renewable power, including wind, solar, hydroelectric, geothermal and biomass, according to the latest statistics from the energy ministry. By Rebecca Conan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil reports more off-spec biodiesel March-April
Brazil reports more off-spec biodiesel March-April
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Russia leads Opec+ output fall
Russia leads Opec+ output fall
London, 10 May (Argus) — Opec+ crude output by members subject to cuts fell by 440,000 b/d in April as Russia began implementing a fresh cut and Iraq and Kazakhstan curbed some of their overproduction. This saw the group's production fall to 34.11mn b/d, which was 140,000 b/d above quota, Argus estimates. Still, this was a marked improvement on the 230,000 b/d overproduction that it recorded in March. The lower production has not provided much support to oil prices, which have shed $5-8/bl in the past month. Several members of the alliance are implementing a new set of "voluntary" cuts that came into effect in January and, for now, run to the end of June. What Opec+ decides to do beyond this will probably be decided at a ministerial meeting in Vienna on 1 June, although the likelihood of a rollover has grown as oil prices have fallen. The big mover last month was Russia, whose output fell by 210,000 b/d to 9.29mn b/d. The drop is related to Russia's pledge to start phasing out an existing 500,000 b/d export cut commitment from April and replace it with a 471,000 b/d production cut by June. But the country remained 190,000 b/d above its new 9.1mn b/d target for April. And while the output fall shows Russia has made headway with its pledge to reduce production, sanctions on the country's oil industry and Ukrainian attacks on its refineries could affect its crude output in the months ahead. Iraq and Kazakhstan also reduced their output last month, while remaining well above target. Iraqi output fell by 40,000 b/d to 4.14mn b/d, mostly owing to lower crude use by the power sector. But this was still around 140,000 b/d above its target of 4mn b/d. Kazakhstan's output fell by 40,000 b/d to 1.54mn b/d — the second month in a row that its output has fallen. But it was also still around 70,000 b/d above its target of 1.47mn b/d. Compensation plans Iraq and Kazakhstan have each submitted plans to the Opec+ Joint Ministerial Monitoring Committee detailing how they intend to compensate for producing above target in the first four months of the year. As things stand, Iraq says it will produce 50,000 b/d below quota in May-September, 100,000 b/d below quota in October-November and 152,000 b/d below quota in December. Kazakhstan's compensation plan starts in May with an initial cut of 18,000 b/d below target. It would then stick to its target in June and July before implementing a cut of 131,000 b/d in August, no cut in September, 299,000 b/d in October, 40,000 b/d in November and no cut again in December. The two countries' plans are dependent on a final production figure for April from secondary sources — including Argus — and could be adjusted after it becomes available. Nigerian production recorded a large fall in April, dropping by 100,000 b/d to 1.4mn b/d, the lowest since 1.28mn b/d in August 2023. This left the country 100,000 b/d below its target of 1.5mn b/d. Production was relatively uneventful in the Mideast Gulf Opec+ contingent. Saudi Arabia's output fell by 30,000 b/d to 8.97mn b/d, the UAE's fell by 20,000 b/d to 2.93mn b/d, Kuwait's dropped by 20,000 b/d, while Bahrain's production increased by 30,000 b/d to 190,000 b/d. All four members were more or less within their targets. Iran, which like Libya and Venezuela is not bound by production targets, boosted its output by another 20,000 b/d to 3.3mn b/d — the highest since October 2018. The gains have come despite US sanctions and Washington's attempts to crack down on the country's oil trade. Opec+ crude production mn b/d Apr Mar* Apr target† ± target Opec 9 21.32 21.54 21.22 0.10 Non-Opec 9 12.79 13.01 12.75 0.04 Total Opec 18 34.11 34.55 33.97 0.14 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Apr Mar* Apr target† ± target Saudi Arabia 8.97 9.00 8.98 -0.01 Iraq 4.14 4.18 4.00 0.14 Kuwait 2.41 2.43 2.41 -0.00 UAE 2.93 2.95 2.91 0.02 Algeria 0.91 0.92 0.91 0.00 Nigeria 1.40 1.50 1.50 -0.10 Congo (Brazzaville) 0.28 0.25 0.28 0.00 Gabon 0.23 0.25 0.17 0.06 Equatorial Guinea 0.05 0.06 0.07 -0.02 Opec 9 21.32 21.54 21.22 0.10 Iran 3.30 3.28 na na Libya 1.22 1.18 na na Venezuela 0.82 0.85 na na Total Opec 12‡ 26.66 26.85 na na *revised †includes additional cuts where applicable ‡Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Apr Mar* Apr target† ± target Russia 9.29 9.50 9.10 0.19 Oman 0.76 0.76 0.76 0.00 Azerbaijan 0.48 0.48 0.55 -0.07 Kazakhstan 1.54 1.58 1.47 0.07 Malaysia 0.35 0.35 0.40 -0.05 Bahrain 0.19 0.16 0.20 -0.01 Brunei 0.08 0.08 0.08 -0.00 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.08 0.08 0.12 -0.04 Total non-Opec† 12.79 13.01 12.75 0.04 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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