The U.S. Energy Information Administration (EIA) reported this week that Gulf Coast refinery runs are approaching the levels experienced prior to impacts of Hurricane Harvey in late August. For the week ending October 20, gross inputs to Gulf Coast petroleum refineries averaged 8.8 million barrels per day, more than 300,000 barrels per day higher than the previous five-year range. Those refinery runs had been higher than the five-year range for much of 2017 prior to Harvey making landfall.
The U.S. Federal Regulatory Commission (FERC) on Tuesday rejected a request from the California Independent System Operator (Cal-ISO) related to keeping unchanged the hours that it offers incentives for power plants and other resources during periods of peak demand. Cal-ISO has proposed a shift in availability assessment hours from the current 1:00 PM to 6:00 PM in April through October to the hours of 4:00 PM to 9:00 PM, which is consistent with current practices for non-summer months. However, FERC rejected the proposal, saying it would benefit only a small amount of resources and that it would reward resources for being available when they weren’t needed.
Ahead of the group’s next meeting on November 30, the Organization of Petroleum Exporting Countries (OPEC) is reportedly working toward an extension of its oil production cuts through the end of 2018, while also discussing an eventful phasing out of the supply curtailments. The “exit plan” is meant to assure market participants that OPEC won’t immediately flood the market with returning supplies once production quotas are lifted.