Latest news with #NicoleJao
Yahoo
2 days ago
- Business
- Yahoo
California fuel imports hit 4-year high amid refinery outages
By Shariq Khan and Nicole Jao NEW YORK (Reuters) -California's fuel imports rose to the highest in four years in May as refiners turned to historical trading partners in Asia and tapped some unusual routes to make up for shortages in the No.2 U.S. oil consumer state, according to shipping data and traders. The rise in shipments to California offers an early look at the future of the biggest gasoline and jet fuel markets in the U.S., which are expected to become more reliant on imports after Phillips 66 and Valero close two major refineries in the state by next year, amid growing regulatory and cost pressures, and declining demand for gasoline. "California's refining capacity is shrinking faster than its fuel demand is declining, forcing the state into a long-term import-dependent position," Kpler analyst Sumit Ritolia said. California's total petroleum product imports rose to 279,000 barrels per day (bpd) in May, the highest since June 2021, when a similar volume was imported, according to data from vessel tracker Kpler. About 187,000 bpd, or nearly 70% of the imports came from South Korea and other Asian exporters, who have historically been the top trading partners for California and other West Coast states, which are geographically isolated from major U.S. refining centers along the Gulf Coast. Recent outages in California at refineries owned by Chevron, PBF Energy and Valero caused a supply crunch in markets along the U.S. West Coast that necessitated more imports, traders and analysts said. "We have seen tighter supplies due to several refinery outages," StoneX oil analyst Alex Hodes said. That boosted prices in the U.S. Pacific Northwest substantially and led to increased imports, he said. There were several days where San Francisco gasoline was more than $40 a barrel above Gulf Coast pricing, nearly double the year-to-date average of $21, WoodMac analyst Austin Lin said. UNUSUAL ROUTES California's imports from the Bahamas, a trade route rarely used by West Coast refiners, hit a record high of 38,000 bpd in May, Kpler data showed. The previous record was 29,000 bpd in March. Flows on the route from the Caribbean were sporadic before this year's refining outages, averaging just 6,000 bpd throughout last year, the data showed. The Bahamas does not refine oil but exports fuel and blending components shipped there from the U.S. Gulf Coast refining hub as part of a workaround to a century-old U.S. shipping law to supply fuel to the East Coast when pipeline shipments are insufficient. The Jones Act bars movement of goods between U.S. ports unless carried by ships built domestically and staffed by local crew. However, there were only 55 such petroleum tankers as of the start of 2024, according to a government report, making them expensive and hard to procure. Sailing a tanker from Texas to California via the Bahamas is typically too expensive, but the recent refinery outages opened up the arbitrage to the West Coast from everywhere, a second U.S. gasoline trading source said. Ample availability in the Atlantic Basin of alkylate - a blending component highly sought for California's unique blend of CARBOB gasoline - could have also contributed to the uptick in imports from the Bahamas, Sparta Commodities analyst Philip Jones-Lux said. Meanwhile, California imported 39,000 bpd of gasoline and alkylate from India last month, the highest since January 2024, Kpler data showed. More waterborne imports will raise fuel costs in the most populous U.S. state, GasBuddy analyst Patrick De Haan said. However, the opening up of these unusual trade routes in May shows the state still has options to shield consumers from extraordinary price spikes, he said. Retail gasoline prices averaged $4.68 a gallon in California on Friday, while the national average was $3.12, according to GasBuddy data.
Yahoo
2 days ago
- Business
- Yahoo
California fuel imports hit 4-year high amid refinery outages
By Shariq Khan and Nicole Jao NEW YORK (Reuters) -California's fuel imports rose to the highest in four years in May as refiners turned to historical trading partners in Asia and tapped some unusual routes to make up for shortages in the No.2 U.S. oil consumer state, according to shipping data and traders. The rise in shipments to California offers an early look at the future of the biggest gasoline and jet fuel markets in the U.S., which are expected to become more reliant on imports after Phillips 66 and Valero close two major refineries in the state by next year, amid growing regulatory and cost pressures, and declining demand for gasoline. "California's refining capacity is shrinking faster than its fuel demand is declining, forcing the state into a long-term import-dependent position," Kpler analyst Sumit Ritolia said. California's total petroleum product imports rose to 279,000 barrels per day (bpd) in May, the highest since June 2021, when a similar volume was imported, according to data from vessel tracker Kpler. About 187,000 bpd, or nearly 70% of the imports came from South Korea and other Asian exporters, who have historically been the top trading partners for California and other West Coast states, which are geographically isolated from major U.S. refining centers along the Gulf Coast. Recent outages in California at refineries owned by Chevron, PBF Energy and Valero caused a supply crunch in markets along the U.S. West Coast that necessitated more imports, traders and analysts said. "We have seen tighter supplies due to several refinery outages," StoneX oil analyst Alex Hodes said. That boosted prices in the U.S. Pacific Northwest substantially and led to increased imports, he said. There were several days where San Francisco gasoline was more than $40 a barrel above Gulf Coast pricing, nearly double the year-to-date average of $21, WoodMac analyst Austin Lin said. UNUSUAL ROUTES California's imports from the Bahamas, a trade route rarely used by West Coast refiners, hit a record high of 38,000 bpd in May, Kpler data showed. The previous record was 29,000 bpd in March. Flows on the route from the Caribbean were sporadic before this year's refining outages, averaging just 6,000 bpd throughout last year, the data showed. The Bahamas does not refine oil but exports fuel and blending components shipped there from the U.S. Gulf Coast refining hub as part of a workaround to a century-old U.S. shipping law to supply fuel to the East Coast when pipeline shipments are insufficient. The Jones Act bars movement of goods between U.S. ports unless carried by ships built domestically and staffed by local crew. However, there were only 55 such petroleum tankers as of the start of 2024, according to a government report, making them expensive and hard to procure. Sailing a tanker from Texas to California via the Bahamas is typically too expensive, but the recent refinery outages opened up the arbitrage to the West Coast from everywhere, a second U.S. gasoline trading source said. Ample availability in the Atlantic Basin of alkylate - a blending component highly sought for California's unique blend of CARBOB gasoline - could have also contributed to the uptick in imports from the Bahamas, Sparta Commodities analyst Philip Jones-Lux said. Meanwhile, California imported 39,000 bpd of gasoline and alkylate from India last month, the highest since January 2024, Kpler data showed. More waterborne imports will raise fuel costs in the most populous U.S. state, GasBuddy analyst Patrick De Haan said. However, the opening up of these unusual trade routes in May shows the state still has options to shield consumers from extraordinary price spikes, he said. Retail gasoline prices averaged $4.68 a gallon in California on Friday, while the national average was $3.12, according to GasBuddy data. Sign in to access your portfolio
Yahoo
15-05-2025
- Business
- Yahoo
Oil falls after US crude inventories rise
By Nicole Jao NEW YORK (Reuters) -Oil prices eased on Wednesday after government data showed U.S. crude oil stockpiles rose unexpectedly last week, prompting investor concerns of excess supplies. Brent crude futures settled 54 cents, or around 0.81%, lower to $66.09 a barrel. U.S. West Texas Intermediate crude slipped 52 cents, or 0.82%, to $63.15. Both benchmarks traded close to their highest in two weeks in the previous session, lifted by a temporary cut in U.S.-China tariffs. The benchmarks fell after data from the Energy Information Administration showed crude stockpiles rose by 3.5 million barrels to 441.8 million barrels last week. Analysts in a Reuters poll had expected a 1.1 million-barrel draw. [EIA/S] Net U.S. crude imports rose last week by 422,000 barrels per day, the EIA said. API industry data also showed a large build of 4.3 million barrels in crude stocks last week, market sources said on Tuesday. [API/S] "Definitely, the crude build in the API numbers was not of help," UBS analyst Giovanni Staunovo said of Wednesday's oil price fall. The Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+, has been increasing supply to the market. On Wednesday, however, OPEC trimmed its forecast for growth in oil supply from the United States and other producers outside the wider OPEC+ group this year. "They are not changing their demand profile but adding more barrels," said Bob Yawger, director of energy futures at Mizuho. "At some point, supply is just going to swamp out demand and drill the market lower." A rebound in the U.S. dollar also weighed on prices on Wednesday. A stronger greenback makes dollar-denominated oil more expensive for investors holding other currencies, hurting demand. Sign in to access your portfolio
Yahoo
05-05-2025
- Automotive
- Yahoo
Supply issues, compliance costs drive up California fuel prices, EIA says
By Nicole Jao (Reuters) -Drivers in California pay higher prices at the pump than any other state in the country due to supply issues, costs from environmental compliance and fuel requirements, and high state taxes and fees, the U.S. Energy Information Administration said on Monday. In March, costs from Californian environmental programs such as Cap-and-Trade and the Low Carbon Fuel Standard added as much as $0.54 per gallon, the latest data showed. Consumers in California also pay around $0.90 per gallon in taxes and fees as of March, the highest in the country, the EIA said. WHY IT'S IMPORTANT California is the largest U.S. gasoline market but several fuelmakers have ceased operations at less profitable facilities, citing regulatory challenges and market dynamics. Six plants have shut since 2008, two of which have converted to producing renewable fuels. The state will likely see even higher gasoline prices as refinery closures put pressure on fuel supply and force the state to rely more on imports from countries like India and South Korea. Retail prices for regular grade gasoline in the state often exceed the national average by more than a dollar per gallon, the EIA said. CONTEXT In October, California Governor Gavin Newsom signed into effect ABX2-1, a bill designed to prevent fuel supply shortages in the state that gives regulators more control over inventory levels for refiners. Shortly after, Phillips 66 announced plans to shut its large Los Angeles-area oil refinery in the fourth quarter of 2025. Last month, Valero Energy announced plans to cease operations at its San Francisco-area oil refinery next year. Sign in to access your portfolio
Yahoo
23-04-2025
- Business
- Yahoo
US oil refiners' Q1 profits likely fell despite stronger margins
By Nicole Jao NEW YORK (Reuters) - Investors are expecting top U.S. refiners to report quarterly losses, even as their margins improve, as they brace for the ripple effect from U.S. President Donald Trump's sweeping tariffs, energy analysts said. Fuelmakers have seen earnings tumble from record levels in 2022, when a recovery in demand following the COVID-19 pandemic and Russia's invasion of Ukraine drove up refined products prices. In the first quarter of 2025, margins increased from last year's multi-year lows, but seasonal turnarounds and unplanned outages limited refiners' ability to capture revenues. Marathon Petroleum, the top U.S. refiner by volume, is expected to report a per-share loss of 53 cents, compared with $2.58 per share profit a year ago, LSEG estimated. The Findlay, Ohio-based refiner last reported negative EPS in Q1 2021. Valero, the second-largest U.S. refiner by capacity, is set to kick off refiner earnings on Thursday, with analysts forecasting profit of 42 cents per share, down from $3.82 profit a year ago, according to data from LSEG. Phillips 66 is expected to report a loss of 72 cents per share, versus $1.90 per share profit a year ago, according to LSEG estimates. UNDER PRESSURE Earnings were under pressure during the quarter due to lower average capture rates, which dropped to 63% in the first quarter from 71% a year ago, Tudor, Pickering, Holt & Co analyst Matthew Blair said in a note. Capture rates, which represent a refining company's ability to profit from market conditions, fell partly due to heavy seasonal maintenance, unplanned outages and tighter crude differentials. Independent refiner PBF Energy took its 157,000 barrel-per-day (bpd) Martinez, California, refinery offline in February after a fire. The fire-damaged units will remain shut until the fourth quarter. PBF is expected to report a loss of $2.91 per share, down sharply from 85-cents profit a year ago. However, higher gasoline and diesel futures cracks in the first quarter helped offset some losses. "Globally, there was a 3 million-barrel-a-day loss of availability from the refining sector across the first quarter compared to what we originally were expecting," said Alan Gelder, vice president of refining, chemicals and oil markets at Wood Mackenzie. Margins were also helped by the slower-than-expected ramp up of new plants such as Nigeria's Dangote refinery and Mexico's Dos Bocas, he added. DEMAND IN FOCUS Investors want clarity about how the ongoing trade war between the U.S. and China may impact demand for refined products including gasoline, diesel and jet fuel, said TD Cowen analyst Jason Gabelman. Global oil and fuel demand is expected to grow by 900,000-bpd from last year, a drop from its previous expectation of 1.2 million bpd, the U.S. Energy Information Administration said in its latest Short-Term Outlook. Shares of the top three U.S. refiners fell to their lowest since 2023 in April when U.S. President Donald Trump announced new reciprocal tariffs. Margins have held up better in the refined product space than crude, said Ben Hoff, head of commodity strategy at Societe Generale. But the indirect impact of slower economic growth will eventually play out in refined products. "The question is really not so much if, but when that starts rippling forward and creeping into margins," Hoff said.
