By OGJ editors
HOUSTON, July 25 -- Problems at US refineries boosted gasoline futures prices Wednesday, which pulled up other energy commodities on the New York Mercantile Exchange.
Workers at Phillips Petroleum Co.'s 245,00 b/d refinery in Trainor, Pa., were still taking processing units out of service Thursday in a slow, controlled shutdown following a fire near the outlet of the facility's flare system Tuesday afternoon.
That fire was extinguished in about 4 hours. No one was injured, and there were no adverse impacts on the community or the environment, company officials said. There's no indication yet how long that refinery may be down.
Also late Tuesday, a unit of BP PLC shut down for maintenance a small "ultracracker" unit—a hydrocracker that produces low-sulfur, high-octane fuels—at its 460,000 b/d refinery in Texas City, Tex. That unit, with a capacity of 40,000-60,000 b/d, will be out of service for a few days, officials said.
Meanwhile, ExxonMobil Corp. said Thursday the planned restart of a crude distillation unit at its Baytown, Tex., refinery will be delayed as long as 4 weeks because of corrosion in associated pipes. The unit, one of three at the 529,000 b/d plant, was taken down for repairs in late June and was originally slated for restart in late July.
However, sources said some associated pipes must be replaced and that it may be late August before the unit comes back on stream.
The accrued loss of refining capacity during the summer driving season caused the August contract for unleaded gasoline to jump 2.81¢ to 82.33¢/gal, recouping most of its losses during the two previous trading sessions on NYMEX.
The market also responded to bullish reports of drawdowns of US inventories of oil and petroleum products during the previous week. The US Department of Energy early Wednesday reported US oil stocks declined by 3.7 million bbl last week, with gasoline and distillate oil inventories down by 600,000 bbl and 200,000 bbl, respectively. A report by the American Petroleum Institute late Tuesday put the inventory declines at more than 6 million bbl of oil, 1.3 million bbl of gasoline, and 2.4 million bbl of distillate.
The September contract for benchmark US sweet, light crudes gained 56¢ to $26.87/bbl Wednesday on NYMEX, while the October contract rose 38¢ to $26.36/bbl. Heating oil for August delivery bumped up 1.75¢ to 67.6¢/gal, and natural gas for the same month jumped 15.3¢ to $3.04/Mcf.
The US Energy Information Association reported Thursday that 64 bcf of natural gas was injected into US underground storage last week. That was down from injections of 69 bcf the previous week and 76 bcf during the same period a year ago, but still "at the high end" of Wall Street's expectations, said Robert S. Morris with Solomon Smith Barney Inc. in New York. US gas storage now stands at nearly 2.5 tcf, representing surpluses of 334 bcf year-over-year and 364 bcf over the 5-year average, he said.
In London, futures prices for North Sea Brent oil also increased in response to bullish reports of US inventories. Brokers said that market needed that stimulus to justify an upward correction from its previous fall. However, they said it likely was not enough to push the price for Brent oil above $25.50/bbl on the International Petroleum Exchange. The September contract closed at $25.33/bbl Wednesday, up 29¢ for the day.
However, the August natural gas contract lost 4.8¢ to the equivalent of $1.92/Mcf on the IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes gained 15¢ to $24.98/bbl Wednesday.