Houston gasoline rack demand finally recovered the week ending April 28, 2016 from the “Tax Day Flood” of April 18, 2016, where heavy rains and widespread flooding closed roads and damaged thousands of vehicles, according to Genscape Supply Side Analyst data.
On April 18, 2016, Houston and Pasadena, TX, rack loadings for regular, premium, and midgrade gasoline fell to just 84,000 bpd, 53 percent below the previous week, according to Genscape Supply Side Analyst data. The next day, gasoline rack activity initially rebounded to 179,000 bpd, up five percent from the prior Tuesday, as trucks looked to refill stations following the treacherous road conditions the previous day (see graph below).
However, gasoline rack activity in the Greater Houston Area remained depressed in the days to come, staying consistently below levels seen the week prior to the April 18, 2016 flood. On April 21, 2016, gasoline rack activity in Houston and Pasadena fell to 153,000 bpd, seven percent below the previous week.
On April 25, 2016, one week after the “Tax Day Flood,” gasoline rack activity reached 149,000 bpd. This was, of course, substantially higher than the lows of April 18, 2016 (77 percent week-on-week). However, this was still markedly below the previous two weeks in April 2016, where Houston/Pasadena gasoline rack movements hit 171,000 bpd on April 4 and 179,000 bpd on April 11, 2016.
Data for April 26-28, 2016 shows the continuous recovery in Houston/Pasadena gasoline demand from the decrease caused by the April 18 flood, with rack activity near or exceeding 169,000 bpd, the weekday average for the first two weeks of April prior to the flood.
Despite the apparent decline in gasoline demand due to the April 18, 2016 flood, rack gasoline prices in the Houston area steadily increased from April 18 through last Friday, according to volume weighted average rack prices as published in Genscape’s Supply Side Analyst. Regular gasoline prices increased nearly $0.20/gal from April 19 to April 28, 2016, with regular gasoline rack prices averaging $1.53/gal on April 28. The rise in price was likely due to an increase in the CME Group NYH RBOB futures basis price, the switch to lower 9.0 Reid Vapor Pressure (RVP) gasoline ahead of summer, and several refinery outages in Houston prior to the flooding.
On April 18, 2016 the 70,000 bpd fluid catalytic cracker was shut down at Shell’s 340,000 bpd Deer Park, TX, refinery, according to Genscape imagery of the refinery. Previously, Lyondell shut its 95,550 bpd vacuum distillation unit (VDU) on April 11, 2016, and the associated 130,000 bpd crude distillation unit on April 12, 2016 at its 280,390 bpd Houston refinery, and a second 95,550 bpd VDU on April 15, 2016, as observed by Genscape. These shutdowns were in response to a fire at Lyondell’s 42,000 bpd coker on April 8, 2016. One of the VDUs (that was shut on April 15, 2016) was restarted May 1, 2016, according to Genscape. The 130,000 bpd CDU and its associated VDU remain offlineas of May 2, 2016.
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