Wednesday August 30, 2017
As September NYMEX futures contracts approach expiration (Thursday), RBOB and Heating Oil continued their torrid march higher, and the prompt RBOB contract hit its highest absolute level in two years.
The storm formerly known as Hurricane Harvey is dumping copious amounts of rain over Western Louisiana and the Lake Charles refining area. Even though Texas' Corpus Christi and Texas City plants are beginning to ramp up operations, at least 25-percent of domestic refining capacity is still shut-in and not ready to start.
Additionally, late Wednesday, Colonial Pipeline announced an immediate shut-down of its Main Distillate line ("Line 2"), and a shut-down of its Main Gasoline line ("Line 1") for Thursday. According to Colonial, the shut-downs are due to lack of product entering the line (not surprising, given that two main injection points, Houston and Port Arthur, don't have working refineries) and NOT storm damage. Meaning they should be able to start back up when product is ready to go back in. Little consolation, when without any barrels in the line, deliveries along the East Coast will stop very, very soon.