Per last week’s DOE repot, refinery activity ground to a virtual halt. Over the last four reports throughput averaged 14.5 MMbbl/d. That is 347 Mbbl/d or 2.6% below the 10-year average ended 2007, exclusive of outliers in 2004 (Hurricane Ivan) and 2005 (Hurricane’s Katrina and Rita). As Platts put it last week, refinery throughputs plummeted “…on weak margins”.
This drop in throughput is reasonable. In the September 17th issue of The Schork Report we commented how the NYMEX 3:2:1 crack spread was yielding only half its August highs. Therefore, in the week’s ahead the table was set for a significant drop in refinery throughput with a corresponding drop in demand for crude oil. Indeed.