St James filling up – Genscape

08.03.16. Lower refinery demand is driving crude stocks at the St James, Louisiana hub to record highs, according to Genscape.
Crude stocks in St James climbed 1.9 million bbls to a record high the week ending 26 February 2016 and could continue to increase if demand falls further at US Midcontinent refineries that source feedstock from the Gulf Coast.
A refined products glut in the Midcontinent has led to decreased run rates there and in part caused tanks at St James to fill, Genscape adds.
The storage build coincided with decreased outgoing crude pipeline volumes. Flow rates declined 88,000 bpd to 225,000 bpd on the Marathon-operated 1.2 million bpd St James-to-Patoka, IL, Capline Pipeline, which feeds Valero’s Memphis refinery. The refinery consumes up to 195,000 bpd of light sweet crude from and outputs exclusively light products.
The stock build was also probably influenced by a weaker Louisiana Light Sweet differential. The return of a major seller to the Louisiana crude market caused the differential for Gulf Coast benchmark LLS to decrease slightly over the week ending 26 February, as it was heard to trade at WTI plus US$2.40/bbl last on 28 February. The prior week, LLS was assessed at WTI plus $2.55/bbl.