US Richardson:Very Encouraged By Mtg With Oil Refiners
Dow Jones Newswires
WASHINGTON-- U.S. Energy Secretary Bill Richardson said Monday that he was very encouraged by his meeting with U.S. oil refiners, distributors and marketers Monday afternoon - but he added the country is "not out of the woods yet" in preparing for the winter heating season.
"It appears that they are rapidly moving and stocking up on inventory," Richardson told reporters after the meeting. There was good news regarding refinery utilization, maintenance plans and inventory building, he said.
At the meeting, the Department of Energy and industry representatives established a joint working group to monitor the oil market situation, with weekly meetings planned.
Richardson said he is "a bit concerned" about reports of U.S. heating oil exports at a time when DOE is trying to encourage domestic stockpiling. But he said DOE favors free trade, rather than export restrictions.
Following the meeting, officials from the American Petroleum Institute said they had told DOE officials oil export restrictions would damage the U.S. in the long-term.
API President Red Cavaney said most U.S. refineries are running at maximum capacity now. Although heating oil inventories are low, Cavaney stressed that about 90% of winter heating oil demand is met by refinery production during the winter and not inventories.
Bob Slaughter, who attended the meeting on behalf of the National Petrochemical and Refiners Association, said industry reaction was mixed to DOE's release of up to 30 million barrels of crude from the strategic petroleum reserve.
Cavaney said some refiners worried the SPR release was price manipulation by the government, but others at the meeting felt it gave some extra "cushion" to the market heading into the winter.
DOE is taking best and final offers on the SPR crude oil until Wednesday morning and is expected to announce awards Friday.
Richardson said he asked refiners to defer any discretionary maintenance shutdowns they could without sacrificing safety. He singled out Amerada Hess Corp. (AHC) as one refiner who responded positively to the call.
Slaughter of NPRA said refiners have been running as high as they can, logging 94%-96% utilization of capacity last month. They plan to continue to run at the highest rates they safely can, but some will have to shut down this month for maintenance and repair, he said. |
