After A Strong Monday Rally, Refined Products Are Seeing A Modest Sell-Off Tuesday Morning

After a strong Monday rally, refined products are seeing a modest sell-off Tuesday morning. A rash of refinery upsets and the February inflation report both seem to be contributing to the price swings in the early going as the complex is clearly still unclear about where it’s going.

February’s CPI came in just ahead of estimates at 3.8% for the past year, with the seasonal recovery in gasoline prices adding to the inflation, after lowering the total for several months.

Exxon’s 235mb/day refinery outside Normandy France had a fire Monday, which coincided with the rally in RBOB futures, which would make sense given the US East Coast’s reliance on European imports to balance supply during driving season.

Ukraine continued to hammer Russian refineries and fuel depots with drone attacks this week, and reports suggest Lukoil’s 360mb/day NORSI refinery was damaged. That facility accounts for more than 10% of the country’s gasoline output.

Can’t catch a break: Total’s Port Arthur refinery has taken over the lead in TCEQ notices in 2024, after Marathon Galveston Bay took top honors for most troubled plant last year. The 238mb/day Total facility reported that multiple units were shut due to a leak in an FCC unit on Monday, continuing a string of unsuccessful attempts to get the facility back up and running after January’s deep freeze.

Ethanol prices continue their recovery rally this week after reaching 4-year lows in February. Stronger corn prices, lower domestic output, and expanded approvals of E15 this summer are all seeming to contribute to that rally. RIN values have also stabilized around the 45-47 cent range, with the bounce in corn values providing some optimism that the worst of the RIN collapse (that were worth $1.57 this time last year) may be over.