The one petroleum refinery in Colorado shut down in late December after sustaining harm from extraordinarily chilly climate, and it’s anticipated to stay offline for months to restore, the refinery proprietor and operator, Calgary-based Suncor, acknowledged.
The refinery outage might tighten the provision of gasoline and diesel in Colorado and, extra broadly, the Rocky Mountain area, resulting in larger retail costs for each. From the top of December to February 20, the typical retail gasoline value elevated 51% in Colorado and 27% within the Rocky Mountain area, in response to our Gasoline and Diesel Gas Replace, in contrast with a 9% improve in america general.
On December 24, Suncor shut down its 103,000-barrel per day (b/d) oil refinery in Commerce Metropolis, Colorado, simply exterior of Denver. Suncor introduced that excessive chilly climate earlier within the month had broken gear and that the repairs would require a full shutdown of the power and delay operations till the top of the primary quarter of 2023.
Since December 26, the typical retail gasoline value in Colorado elevated by $1.39 per gallon (gal) to $4.10/gal, as of February 20.
In line with our Refinery Capability Report, the Commerce Metropolis refinery is the one lively refinery in Colorado, probably the most populous state within the Rocky Mountain area. We estimate that Colorado accounted for 41% of whole gasoline gross sales and 25% of whole distillate gross sales (together with each jet gas and diesel) within the Rocky Mountain area in 2021.
The Commerce Metropolis refinery outage means the area should draw from current regional inventories and switch petroleum merchandise from different out-of-state refineries. Colorado has larger pipeline connectivity to different U.S. areas than different states within the Rocky Mountain area. So, transfers from the Midwest and Gulf Coast ought to decrease withdrawals from regional inventories.
Rocky Mountain inventories of gasoline and diesel gas began the 12 months nicely beneath the five-year common. Current low inventories current a further supply of uncertainty for costs within the Rocky Mountain area as a result of withdrawals are prone to proceed till manufacturing at Commerce Metropolis resumes. Increased costs might stimulate elevated refinery operations in Utah and Wyoming to compensate for the outage and backfill manufacturing that might have come from Commerce Metropolis.