US East Coast crude refining margins get boost, double

Bloomberg

US East Coast refining margins have more than doubled in the past month, helped by weakening physical crude markets and a fire that crippled the biggest facility in the region.
Philadelphia Energy Solutions announced it plans to close after a fire in late June, it’s second that month, destroyed most of an alkylation unit, which makes high-octane gasoline. The complex processed 335,000 barrels of crude a day and supplied about 3 percent of gasoline demand in the region.
While the profit margin of refining West African Forcados crude in the region was showing signs of recovery earlier in the month, the
catalytic cracking margin jumped about 68 percent after the latest fire, according to Oil Analytics data. Gasoline prices have risen to attract more supply from the US Gulf Coast and overseas, particularly Europe.
“With the closure of the refinery, now all that product isn’t being made so there’s the expectation of a shortage of supply and a tight market,” said Sandy Fielden, director of Oil and Products Research at Morningstar Energy Commodities. “That’s leading to higher prices for gas and thus higher margins for refineries.”
One beneficiary has been PBF Energy Inc, which has taken over the position of the largest East Coast refiner. Its shares have surged about 14 percent since June 20, compared with about 5.4 percent for a Bloomberg Intelligence index of North American refiners.
Margins may have further to rise if a gasoline-producing unit that shut Friday at Irving Oil Ltd’s St John refinery in New Brunswick, Canada, is down for an extended period.
Irving’s refinery, the largest in Canada, is a key supplier of gasoline and diesel to New England.