Frozen Texas Refineries Race to Restart to Cash in on Margins
(Bloomberg) -- Texas refineries are racing to restart plants paralyzed by last week’s freeze to take advantage of the best returns for turning crude into fuels in a year.
The storm knocked off 16 refineries in Texas, three in Oklahoma and two in Louisiana, putting a huge dent gasoline and diesel supplies. That has left an opportunity for plants that are still running to capitalize on the best margins on crude processing since February 2020, excluding the April anomaly when crude below zero. The value of gasoline, diesel and other refined products relative to crude oil, known as the 3-2-1 crack, surged above $19 a barrel this week.
The last time this much refining capacity was knocked offline was in the aftermath of Hurricane Harvey in 2017. The key difference between then and now is that the pandemic continues to curb gasoline demand. Consumption of the fuel remains at the lowest for this time of year since the late 1990s, according to U.S. government data.
©2021 Bloomberg L.P.