A bit old, but some interesting tidbits. Gasoline supplies were up 4 Million barrels last week? Wait a minute! What's that? Why, it's a flying pig!!
Gasoline Rises After Report of Conoco Refinery Outage (Update1)
New York, June 4 (Bloomberg) -- Gasoline rose almost 4
percent after the shutdown of a gasoline unit at a Conoco Inc.
Louisiana refinery raised expectations for leaner supplies.
Problems at the 47,800-barrel-a-day catalytic cracker forced
Conoco to buy gasoline to meet its supply commitments, said
traders, who speculated the unit might be closed for two weeks.
Conoco declined to comment. The problem follows voluntary
shutdowns by Sunoco Inc. and Valero Energy Corp. in the past
month as profit margins fell almost 40 percent since March.
''The gasoline situation is sensitive (to shutdowns) because
eventually, there will be more on the demand side of that
picture,'' said Tim Evans, an analyst at Pegasus Econometric
Group in New York. ''
Gasoline for July delivery rose as much as 1.8 cents, or 3.7
percent, to 50.40 cents a gallon on the New York Mercantile
Exchange. Heating oil for July delivery rose as much as 1.47
cent, or 3.7 percent, to 41.20 a gallon.
Houston-based Conoco, the fifth-largest U.S. oil company,
owns four U.S. refineries. Its Westlake, Louisiana, refinery can
process 226,000 barrels of crude oil daily. DuPont Co. owns
70 percent of Conoco.
The shutdown comes with U.S. gasoline inventories up
2 percent from a year ago and about 8 percent above the five-year
average, according to the American Petroleum Institute. Refinery
production was at 96.7 percent of capacity during the week ended
May 28 even with weak profit margins.
''Gasoline is being supported by the run cuts out there,''
said Tom Bentz, senior vice president-energy at Cresvale
International LLC in New York. Profit margins for refiners are
still low, but ''for the longer term, we're still in the bull
market.''
Crude oil followed products higher. Crude oil for July
delivery rose as much as 61 cents, or 3.6 percent, to $17.35 a
barrel on the Nymex. In London, July Brent crude oil rose as much
as 60 cents, or 4 percent, to $15.55 a barrel on the
International Petroleum Exchange.
''Eventually the product surplus will decrease, usually it
takes a year'' for changes in crude oil supply to fully translate
to the refined products market, said Jean Gaulin, president and
chief executive of Ultramar Diamond Shamrock Corp., the eighth-
largest U.S. oil refiner.
So far, 1999 has been a bad year for refiners because of the
slim margin between prices for crude and refined products, Gaulin
told reporters after a conference yesterday in New York.
The San Antonio-based company, which two months ago
abandoned plans to merge with Phillips Petroleum Co., is seeking
partnerships with foreign producers in order to buy crude at
guaranteed prices.
''It's a partial re-integration. We need to create projects
that eliminate the fluctuation in price and by doing that you
join with producers,'' said Gaulin.
Kosovo
Heating oil prices were held back by speculation that a
peace plan for Kosovo will end jet fuel demand for bombing
missions by the North Atlantic Treaty Organization. The alliance
has flown more than 33,000 missions since the campaign began on
March 24.
Jet fuel is a petroleum distillate, like heating oil, and
hedgers will buy or sell heating oil futures to offset physical
positions in the jet fuel market.
''I'm concerned about what's going to happen to the heating
oil market when the jet fuel demand is not there,'' said Chris
Schachte, a trader at GSC Energy Corp. in Atlanta. ''Some of
those defense contracts are huge and that's a lot of distillate.
If we hadn't had this war, it would have been interesting to see
where heating oil prices would have been.''
NATO officials will meet with Yugoslav military leaders
tomorrow on the Serb border to discuss how to carry out the peace
plan that Yugoslav President Slobodan Milosevic accepted
yesterday, NATO spokesman Jamie Shea said.
U.S. President Bill Clinton said the war could be over
''pretty quickly,'' though like other alliance leaders he said
the NATO bombing would persist until Serb troops withdrew from
Kosovo.
NATO bombed Serb targets overnight and the alliance has seen
''no signs of withdrawal'' so far, Shea said. The air campaign
will continue until the retreat is in full swing, Shea said.
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