West Texas Intermediate light sweet crude oil at Midland, Texas, fell Thursday by its largest amount since mid-December on market talk of reduced rates and/or unit outages at two regional refineries and a pipeline.
March-delivered WTI at Midland ended the day at March cash WTI plus 10 cents/b, down 45 cents/b from Wednesday and the largest single-day decline since December 20, Platts data show.
That is also the lowest premium to cash WTI since November 28.
"Middy was down 40 cents today -- that was big," a US crude trader said Thursday.
The hard decline came following several unrelated issues, each of which has the potential to cause an increase in supply in crude in the region.
The fluid catalytic cracker was said to be shut at Phillips 66's 200,000 b/d Ponca City, Oklahoma, refinery.
"Phillips 66 saying no impact to crude runs so I think this is a buy the rumor, sell the fact type of situation," a second US crude trader said Thursday. The trader did not clarify if he spoke with Phillips 66 or if that was hearsay.
Market sources were split on whether Phillips 66 and joint-venture partner Cenovus were experiencing an issue at their 146,000 b/d Borger, Texas, refinery, or whether the refinery was preparing for planned maintenance. Platts reported February 3 that Borger was set to enter planned turnaround in the first quarter on the 56,000 b/d FCC unit, 31,280 b/d reformer and 28,380 b/d coker, according to market sources.
Finally, the 300,000 b/d BridgeTex Pipeline, a takeaway route for Permian crude production to Houston, was said to be running at 50,000 b/d, less than one week after it was shut for maintenance and brought back online, market sources said.
The pipeline, a 50:50 joint venture between Magellan Midstream Partners and Plains All American Pipeline, will expand to 400,000 b/d starting in the second quarter.
"They came back up to full rate after planned maintenance last week but have since reduced rate to" 50,000 b/d, the second US crude trader said. "Hearsay on the 'back-up' part. That's not coming from Magellan."
Magellan said earlier this month the pipeline will carry an average of 215,000 b/d this year, flat from 2016, with incremental volumes only expected in 2018.
