Motiva announced it’s shutting down its massive 600,000 bpd Port Arthur, Texas refinery due to cold weather.

Oil popped and then gave it back on the announcement. A refinery closure means less demand for crude oil.

At the same time, there’s more demand from customers for heating products so there’s a mismatch. You also get gasoline going offline, which is going to slow the traditional build ahead of the summer driving season.

Meanwhile, it’s tougher to get a sense of what might be shut down on the ground in US oil producing regions because it’s so scattered.

This whole episode is really turning into a snafu and the cold weather is going to stick around for a few days.

Looking further out, I struggle to see how this leaves any longer-term effects aside from in natural gas, where we’re now below the 5-year average in inventories.

Other refineries have closed as well. A bigger risk here is that a refinery stays open and it leads to some kind of catastrophe due to frozen pipes or valves.