Month: August 2007

Bad news, Grand Rapids! Autumn refinery work centered on Midwest

From (and The Toledo Blade below):

Midwest oil refineries are planning a heavy load of maintenance this autumn that could keep fuel supplies in the heartland tight through the rest of the year, according to a Reuters survey released Thursday.

Other regions of the United States, however, could see a lighter-then-normal fall maintenance season after many plants completed their overhauls earlier in the year — taking some of the pressure off thin fuel stocks in the world’s biggest energy consumer.

U.S. gasoline supplies are running about 8 percent below last year’s levels due to the persistent refinery outages, with Midwest stocks 9 percent below a year ago, according to the most recent government data.

Experts said the focus of refinery maintenance in the Midwest region comes after plants in the area kept running to take advantage of sterling profit margins while other refineries continued a prolonged recovery from coastal hurricanes in 2005.

“The Midwest has hung on for so long after Katrina that there is a lot there that never went down,” said Mark Routt, an analyst with consultancy group ESAI in Massachusetts.

September is expected to be the heaviest month for Midwest refinery maintenance, with 351,000 barrels per day of the region’s 8.27 million bpd of crude distillation capacity scheduled to shut.

Supplies of gasoline and diesel in the northern tier of the Magellan Pipeline, which runs from Houston to Minnesota are expected to be extremely constrained as two of top refineries are seen going out concurrently.


From The Toledo Blade:

One of the metro Toledo’s two refineries is to be shut down for routine maintenance lasting about two months, starting in about three weeks, people familiar with the operation who asked not to be named said yesterday.

BP PLC is to close its suburban Toledo operation in mid-September, eliminating production of 155,000 barrels a day of regular gasoline and diesel, as well as kerosene, aviation fuel, and some other products, the people said. It supplies BP stations and others selling under different brand names.

The plant generally supplies Ohio and provides products for Detroit. Although BP officials declined to discuss the temporary closure, the planned shutdown likely means the company will buy gasoline supplies to serve the state.

It is unclear whether the work will have any affect on area vehicle fuel supplies or on gas pump prices.

Such maintenance overhaul typically takes place about every four years and often takes about eight weeks to finish.

Jeff Hazle, technical director for the National Petrochemical and Refiners Association, said he did not know specifically what BP might be doing but said such work typically involves inspecting pipes and vessels, replacing equipment, and possibly adding technology to improve performance.

Thats JUST the news I couldn’t wait to hear. 🙁


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Chevron refinery in Mississippi production takes a hit


JACKSON, Miss. (AP)–Chevron Corp.’s (CVX) largest U.S. refinery is processing less crude oil than normal since a fire two weeks ago, but company officials say they are still meeting their customers’ demands.

The oil fire started Aug. 16 in a processing unit near the center of the Pascagoula plant, causing the evacuation of nonessential workers, according to company officials. The blaze sent a large plume of black smoke into the sky, but the fire was contained and extinguished within hours.

“Chevron is running less crude at the refinery due to the damage sustained to the No. 2 crude unit and working closely with its crude suppliers and expect some crude shipments may be canceled or rerouted to other refineries in the company’s global network,” Steve Renfroe, public and government affairs manager for Mississippi, said in a statement. “While the refinery is currently operating at reduced capacity, Chevron has covered its supply requirements and fully anticipates meeting all of its customer product commitments.”

The plant is one of the top 10 petroleum refineries in the United States, processing about 330,000 barrels a day. Daily production under normal conditions is about 5.5 million gallons of gasoline, jet fuel and diesel, according to the company’s Web site.

Just what we need… more refinery problems. In other news, I checked Midwest PADD numbers from last week and they tumbled again. Down another 1 million barrels to a low of 45 million barrels. Haven’t seen numbers this low since this spring when BP had refinery problems at Whiting and Toledo. This does NOT bode well for our local prices (will climb). More news later.

By the way, I’m still waiting for a reset before the holiday weekend to $3.09 again… will it happen, or will retailers lose money all weekend?

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Marathon: New refinery expansion promises broken promises

Marathon announced yesterday that it is exploring a $1 billion expansion of its Detroit refinery- holding the promise of stabilizing gas prices in the region and creating some jobs.

Marathon is studying adding a “whopping” 15,000 barrels per day (at BEST possibly 420,000 gallons of gasoline per day) to the refinery. What do I have to say? Lets see- Marathon is trying to get locals to support the project using the “it’ll help YOU in the long run with cheaper gas prices” a VERY easy thing to say, but I see as a total lie. The United States consumes roughly 403,200,000 gallons of gasoline PER DAY, so HOW in the world is another 420,000 gallons “going to stabilize the region”?

Wow Marathon. Try and hit us with that lie in order for us to “support” you? Ha. While I am for the expansion, I am not for lying to the American people and government as to how it will “positively” effect us. Truth be told, Marathon will be raking in millions per day in additional profit.

This expansion comes on the heels of BP’s announced expansion to its Whiting, Indiana refinery. Both Marathon and BP plan to convert part of their refineries to convert heavy sour Canadian crude (which is much easier to ship… via pipeline instead of on boat from the Middle East)

This is a tiny addition of gasoline to the market. Marathon needs to stop up-playing the significance of a couple hundred thousands of gallons of gasoline to a market that demands hundreds of millions of gallons per day.

Marathon already raised the output of its Detroit refinery back in 2005, a much bigger expansion, bringing capacity from 74,000 barrels per day to 100,000. Another 15,000 barrels per day? Not worth the hype Marathon is playing us with.

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Re-hike to $3.19-$3.29?

Benchmark station in Indiana jumped from 2.89 to 3.09 this evening. As many know, I commonly refer to this station due to its ability to determine GR prices.

Due to this station jumping this evening, I am now expecting local prices to shoot to $3.19-$3.29.

I’m sure MANY folks are going to roll out the “BEFORE A HOLIDAY… AGAIN!?”. Coincidence. Don’t agree? Want to ask questions? Leave a comment or check out the forum.

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Price hike looking likely

Monday, August 27, 2007, 7:15 PM: With the new academic year, I haven’t had much time to follow gas prices the past 10 days, but I have noticed the AXXIS prices (see Links) heading up over the past several days. Given that prices are as low as $2.82 in town, I am in agreement with Patrick that a price hike is coming on Tuesday or Wednesday, probably to $3.09. I am filling up tomorrow morning.

Re-hike to $2.99+ soon!

Just to throw this out there: I’m expecting a rehike to $2.99-$3.09 as soon as today but more likely tomorrow or Wednesday. The Chicago Premium is back (as noted a few posts ago) due to midwest refinery problems (thanks to the heavy heavy flooding in Ohio)

On another note, there is extreme flooding in Findlay, Ohio (Speedway/Super America/Marathon) Headquarters. Maybe its a message? I can’t help but make the connection.

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