Market watch: Energy futures prices advance on reports of refinery problem

By OGJ editors

HOUSTON, June 5 -- Energy futures prices advanced in New York trading Tuesday, buoyed by reports of production problems at a Valero Energy Corp. refinery in Texas City, Tex.

Officials at Valero Energy, based in San Antonio, Tex., said Tuesday that high vibrations in the primary air blower forced the shut down of the newly expanded fluid catalytic cracker unit at that facility. It will take about a week for repairs, they said.

The FCCU has a capacity of 80,000 b/d, while Valero's Texas City refinery has a total capacity of 220,000 b/d.

In other news, a Caracas newspaper reported Alí Rodríguez Araque, the new president of Petroleos de Venezuela SA and outgoing secretary general of the Organization of Petroleum Exporting Countries, will meet with government and industry officials in a visit to the US next week. Rodríguez is now completing a weeklong series of meetings with officials in various OPEC-member countries in the Middle East.

OPEC ministers are scheduled to meet June 26 in Vienna to discuss oil market conditions, but several have already indicated they see no need to increase production. A new secretary general is expected to be selected at that meeting.

Rodríguez is scheduled June 10 to be in Tulsa, where PDVSA's US subsidiary Citgo Petroleum Corp. is based. He is to travel to Washington June 11 for meetings with government officials and to New York City the next day to meet with members of the Council of the Americas.

The July contract for benchmark US sweet, light crudes gained 25¢ to $25.33/bbl Tuesday on the New York Mercantile Exchange. The August contract was up 19¢ to $25.45/bbl. However, both fell in after-hours electronic trading to $24.80/bbl and $24.95/bbl, respectively.

After the close of trading, the American Petroleum Institute reported US oil inventories increased by 6.3 million bbl to 324.2 million last week. US distillate stocks also were up nearly 2.8 million bbl to 127.2 million bbl. But US gasoline stocks declined by 755,000 bbl to 217.7 million bbl.

During regular trading Tuesday on NYMEX, heating oil for July delivery increased by 0.78¢ to 64.28¢/gal. Unleaded gasoline for the same month was up 0.7¢ to 75.34¢/gal. The July natural gas contract also added 8.6¢ to $3.39/Mcf.

The International Petroleum Exchange in London was closed Tuesday for a public holiday.

The average price for OPEC's basket of seven crudes increased by 20¢ to $23.57/bbl Tuesday.

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