Introducing the West Coast Watch Market Analysis
November 18, 2020
The West Coast transportation fuels market is rapidly changing with significant impacts just this year due to the COVID-19 pandemic and the push to de-carbonize the transport sector. Based on these factors and with an eye toward helping stakeholders navigate this challenging market, Stillwater is introducing our West Coast Watch market information portal. Fuel producers, marketers, retailers, and investors need a clear view of refining profitability, and petroleum and renewable fuel supply and demand trends in one place. Stillwater’s West Coast Watch provides the data, news, and analysis stakeholders require to make profitable decisions. Stillwater Associates has provided transportation fuels consulting services for over 20 years and the WCW is an extension of our expertise around mid-and downstream fuels market issues. It provides an outlet for our extensive data and expert analysis. Our monthly West Coast Watch Market Analysis offers the latest refining, petroleum product, and renewable fuels trends. This analysis delivers Stillwater’s exclusive take on market developments and offers valuable forward-looking insights on what these developments may mean for stakeholders. This month we review the impact of COVID-19 and the subsequent stay-at-home orders on West Coast refiners.
In addition to the exceptional challenges facing West Coast refiners in 2020, refiners in California and Washington face unique market pressures even in the best of times. Geographic isolation, unique gasoline and diesel specifications, and greenhouse gas (GHG) reduction regulations including the federal Renewable Fuel Standard (RFS), California’s Low Carbon Fuel Standard (LCFS) and Cap and Trade (C&T) programs and Oregon’s Clean Fuels Program (CFP) make it costly to source finished petroleum products from outside the region, ensuring that in-region refiners are the primary source of finished petroleum products for the West Coast. Based on these factors and with an eye toward helping stakeholders navigate this challenging market, Stillwater has developed a proprietary index to assess West Coast margins at the refinery gate. The West Coast Watch Refining Margin Index is designed around the market enclaves (Southern California, Northern California, and the Pacific Northwest), the typical crude run in West Coast refineries, the cost of compliance with GHG-reduction regulations, and the local refined product prices. This tool provides trends for the refining margin along the West Coast, and we hope our readers will find it instructive.