Last week’s U.S. crude oil market was dominated by weather driven disruptions that tightened crude and distillate balances. Winter Storm Fern triggered widespread freeze offs, cutting Lower 48 weekly average production by 480 Mb/d (see graph below) and driving a 3.46 MMbbl draw in commercial crude inventories, with exports also falling due to terminal disruptions. Refinery runs declined as winter maintenance accelerated, while cold weather sharply reduced gasoline demand but boosted distillate demand, leading to a 5.55 MMbbl draw in distillate stocks, the largest since this period last year. These shifts strengthened margins, with the 3-2-1 crack rising to $24.52/bbl, led by a 20% jump in diesel cracks even as gasoline cracks weakened. Unaccounted for crude volumes swung deeply negative, likely reflecting reporting distortions tied to the scale of weather related supply and logistics disruptions.
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Double-Edged Sword – Refinery ‘Capacity Creep,’ Falling Inventories May Limit U.S. Crude Export Surge
U.S. crude oil production averaged a record 13.6 MMb/d in 2025, up nearly 1.6 MMb/d from 2023, but crude export volumes remained remarkably stable — at or very near 4.1 MMb/d — until a recent Iran-related surge. A key reason: “capacity creep” expansion projects at several Gulf Coast refineries.
Ridin’ The Storm Out – Will the Storm Set to Slam the South Lead to a Winter Storm Uri Reprise?
The gas market was roiled this week by the severe winter weather set to sweep across the country. Today, we discuss the market’s jump in advance of Winter Storm Fern’s arrival and whether its effects will rival the tremendous dislocations caused by Uri.
Winter Storm Fern Freezes Gulf Coast Crude Flows
U.S. Gulf Coast crude exports averaged 3.7 MMb/d last week, sliding nearly 350 Mb/d from the prior week and coming in roughly 200 Mb/d below the 2026 YTD average as Winter Storm Fern swept across the Texas coast.
