OUCH! Well, I stumbled upon the reason the Midwest PADD is down so much… and it does NOT bode well for us. (This is the refinery that I frequently talk about in Whiting, Indiana, near Gary)
Quote from Bloomberg
BP Plc, Europe’s second-largest oil company, said its Whiting, Indiana, refinery has cut production to about half its capacity, or 200,000 barrels, after the plant’s hydrotreating unit failed in March. The problems at BP’s fluid catalytic cracking unit have forced the plant to process more expensive grades of crude. The plant will keep refining at the current rate “until we complete the necessary repairs,” the company said in a statement distributed by the Regulatory News Service today.
Problems at the plant were exacerbated when a crane hit a power line and cut off its power on April 4. That caused an emergency shutdown and a small fire that was quickly extinguished, said Wendy Silcock, a spokeswoman with BP in London.
Look for Grand Rapids and the Midwest to suffer until this mess is resolved. Expect to be paying more than average until at least May, when hopefully the problem will be solved. If it isn’t solved until May, we might see higher summer prices than I previously thought.
Just to see how much this refinery puts out and how much it might effect us, here are the readings from the DOE weekly PADD report. Notice the start in big drops after Whiting production drops:
2/23/07: 55,488 (Whiting running normal)
3/02/07: 54,696 (Whiting reports problem)
Anyway, doesn’t look to get better around here until May, so we may see $3 for a few days until Whiting is back up and running normal.
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