Winter Storm Blair has negligible impact on US Midwest refineries

US refineries in the Midwest appear to have escaped mostly unscathed from the arctic blast which swept east across the upper Ohio River Valley over the weekend, bringing heavy snowfall, icy conditions and windy weather to the region.

"Departure of East Coast winter storm to be followed by relatively quiet weather for much of nation through Wednesday," according to the National Weather Service Short Range Forecast Discussion published on Jan. 6 at 2:41 PM EST.

"A winter storm located over the upper Ohio Valley and Mid-Atlantic region as of Monday afternoon will be quickly exiting eastward into the western Atlantic tonight. While the bulk of accumulating snowfall has ended, light additional accumulations will be possible across portions of the central Appalachians to the Mid-Atlantic coast early tonight," the NWS said.

The Midwest has 3.9 million b/d of refining capacity, according to most recent data from the Energy Information Administration. However, most refiners reported little or no impact from the storm on their operations.

However, local utility outage maps show that HF Sinclair's 162,000 b/d El Dorado, Kansas, refinery lost power, forcing the plant to shut down due to the storm, named Winter Storm Blair.

A company spokesperson did not respond immediately for a request for a comment on the plant, but market sources confirmed the plant had lost power because of the weather.

According to estimates from S&P Global Commodity Insights, the refinery, which runs light, sweet crude, yielded about 63.7% gasoline, 19% gasoil and 4.5% jet in 2023.

Low demand, logistical issues

Winter Storm Blair caused hazardous travel conditions, flight cancellations, record-low temperatures impacting transportation and logistics across the mid-Atlantic and Midwest region, according to fuel distributor Mansfield Fuels.

"Winter Storm Blair has already dropped over 15 inches of snow in parts of Kansas and Missouri, with 6–12 inches expected in southern Ohio and the Mid-Atlantic, including Washington D.C. Blizzard conditions with wind gusts exceeding 40 mph have been reported in Kansas, Nebraska, and Missouri. Icing and freezing rain have caused tree damage and power outages across the central Appalachians," Mansfield's Jan. 6 note said.

The company said it is "actively working with carriers" to work around disruptions caused by Winter Storm Blair.

Several states, including Kentucky, Missouri, Virginia, Maryland, and New Jersey, have declared states of emergency in response to the storm, with federal safety regulations temporarily suspended in some areas to aid emergency relief and fuel transportation efforts," Mansfield said.

"In light of the escalating conditions, Mansfield is moving the following states to Code Orange requesting 48 hours for new deliveries: Maryland, New Jersey, Kentucky, Virginia, Missouri, Washington D.C., Arkansas, Indiana, Illinois, Kansas, Pennsylvania, West Virginia, and Ohio," the note said.

Midwest refined product prices fall

With bad weather keeping Midwestern drivers off the road and out of the air, gasoline, diesel and jet fuel prices softened, reflecting the low demand.

Platts assessed Chicago CBOB at a flat price of $1.8530/gal on Jan. 6, down 4.32 cents/gal from the previous assessment on Jan. 3. The Chicago ULSD flat price was assessed by Platts at $2.0577/gal, down 4.01 cents/gal from Jan. 3. Chicago jet dropped 2.01 cents/gal to $2.0527/gal, Platts assessments showed.

While it appears the worst of the bad weather is over for Midwest refiners, weather warnings have been issued for parts of the US Gulf Coast.

"A community alert from Saint John the Baptist Parish in Louisiana warned that freezing temperatures are likely to occur within the next 24 to 36 hours, with the NWS warning of a hard freeze on Jan. 6 and Jan. 7 along the Louisiana-Mississippi border.

In Texas, the NWS put into effect a cold weather advisory beginning midnight through 9 am CST Jan. 7, forecasting very cold will chills as low as 20 degrees F for portions of south central and southeast Texas.