Crude runs at U.S. refineries have increased steadily since early March to reach some of the highest levels on record. At 16.1 million barrels per day (bbl/d) for the week ending July 5, U.S. crude oil runs were the highest for any week since 2007. This level represented a 2.1-million-bbl/d increase from the first week of March, the low point for the first six months of 2013. While the increase in crude runs since March reflects a particularly strong rebound from spring maintenance, an underlying combination of recent refinery capacity expansions and relatively healthy margins helped drive the absolute level of runs to a multiyear high.
Both the steep ramp-up in runs and the high absolute level in early July were driven by refiners in the Gulf Coast (PADD 3) and Midwest (PADD 2) (Figure 1). The Gulf Coast is home to more than 50 percent of U.S. refining capacity, and thus is often the key determinant of U.S. refining trends. Typically, the Gulf Coast, along with the West Coast, sees the country's earliest refinery turnaround season. In 2013, Gulf Coast runs reached their seasonal nadir the week ending March 1 at just under 6.9 million bbl/d, as several big facilities in the region underwent maintenance, including Lyondell's Houston refinery, Western's El Paso refinery, and Valero's Norco, Louisiana, facility. As facilities began to return from maintenance, Gulf Coast runs increased significantly. In each year from 2008 to 2012, Gulf Coast refiners ramped up crude runs by an average of 860,000 bbl/d from their first-half low point (which ranged anywhere from late January to early April) through the first week of July. This year, however, Gulf Coast runs increased by a staggering 1.6 million bbl/d, to reach 8.5 million bbl/d for the week ending July 5, down only 30,000 bbl/d from the record set the previous week.
To a large extent, record high Gulf Coast crude runs can be attributed to the new distillation capacity at Motiva's Port Arthur plant and relatively robust margins for the area's refiners. In June 2012, Motiva commissioned a new 325,000-bbl/d crude distillation unit at the refinery, but shortly thereafter, it encountered operational difficulties and was shut down for several months. With that expansion now fully operational, Gulf Coast operating distillation capacity stood at more than 8.7 million bbl/d as of January 1, 2013, up more than 180,000 bbl/d from a year earlier. In addition to higher capacity, Gulf Coast refineries are also running at very high levels of utilization, nearly 94 percent on average for the four weeks ending July 5.