US runs on the rise

Crude oil prices remained range-bound yesterday, despite time spreads continuing to correct. Feb/March ICE Brent time spreads are now at only a 13 cents backwardation. In Texas, Motiva’s refinery is restarting its crude unit (200 kb/d out of 600 kb/d) after a power outage last week that limited the throughput of the largest refinery in the US. Combined with that outage, Shell’s Norco 230 kb/d refinery in Louisiana is fully restarting now, which shows how badly affected the refinery was after the hurricane. We expect US refiners to partially ramp up runs throughout December, which should continue to build refined products inventories. The recent build in inventories was strong, despite Gulf coast refineries not running at maximum capacity.