|
BP oil refinery blast in texas bumps prices Original Source Link: (May no longer be active)
http://quote.bloomberg.com/apps/news?pid=10000103&sid=ajgw1f5gaXeQ&refer=news_indexhttp://quote.bloomberg.com/apps/news?pid=10000103&sid=ajgw1f5gaXeQ&refer=news_index
Crude Oil, Gasoline Jump After Fire at BP Refinery in Texas
March 24 (Bloomberg) -- Crude oil rose and gasoline futures surged to a record after an explosion at BP Plc's Texas City crude- oil refinery, the third-largest in the U.S., raised supply concerns before the peak summer driving season.
At least four people died and 29 were injured in the blast at the refinery, which can process 470,000 barrels of oil a day, KPRC- TV of Houston reported. U.S. refineries used 90.2 percent of their capacity last week, the Energy Department said yesterday.
``This is going to send product prices higher,'' said Mike Armbruster, co-founder of Altavest Worldwide Trading Inc. in Laguna Hills, California. ``The pedal is to the metal in terms of refinery usage,'' and nobody knows yet how much damage has been done at the Texas plant, he said.
Crude oil for May delivery rose as much as 69 cents, or 1.3 percent, to $54.50 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $53.71 at 11:34 a.m. Sydney time.
Gasoline for April delivery jumped as much as 2.1 percent to $1.6080, the highest since the contact began trading in 1984. It last traded at $1.5851.
The Texas City refinery is London-based BP's largest, stretching over 1,200 acres and employing about 1,512 workers. It includes 30 refining units and produces gasoline and other petroleum products, according to the company's Web site.
The explosion, at 1.20 p.m. local time, resulted in an unconfirmed number of deaths, BP spokesman Hugh Depland said in an e-mailed statement. The incident occurred in a unit that makes components that boost octane in gasoline, the company said.
`Monster'
``It's a monster of a refinery,'' said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. If there's extended damage, it would be ``the wrong time for us to be seeing the loss of this unit as we get set to go into the gasoline season.''
Gasoline ended unchanged yesterday after earlier jumping to $1.5850 a gallon after the department said supplies fell 4.1 million barrels to 217.3 million last week. It was the biggest weekly decline since the week ended Aug. 22, 2003. Inventories were expected to drop 1.5 million barrels, according to the median of analyst responses.
Retail gasoline prices have risen as refiners pass on their higher costs. Pump prices for regular grade gasoline, averaged nationwide, rose 1.1 cents to a record $2.106 a gallon March 22, according to the AAA, formerly the American Automobile Association.
Pump Price
Any minor refinery disruption ``will have an impact on the price of gasoline at the pump,'' said Mark Baxter, director of the Maguire Energy Institute at SMU Cox School of Business in Dallas. ``And this sounds like it could be a major one,'' he said.
The blast stemmed a 6.3 percent slide in crude oil prices in the past two days. May crude traded at a record $58.16 a barrel March 17, amid concerns demand was rising faster than supplies.
Crude fell more than $2 a barrel yesterday, the biggest one- day decline this year, after the department reported oil inventories reached the highest since July 2002.
Stockpiles gained 4.1 million barrels to 309.3 million in the week ended March 18, the report showed. Supplies were expected to rise 2 million barrels, according to the median of forecasts by 15 analysts surveyed by Bloomberg.
Prices are down more than $3 from last week's record amid signs that higher U.S. interest rates will slow economic growth and fuel consumption. The Federal Reserve raised the benchmark interest rate on March 22 for the seventh time since June, saying inflation pressures have picked up. Prices paid by U.S. consumers rose 0.4 percent in February.
`Bit of Air'
The refinery blast will only temporarily stall the decline in crude oil prices, Altavest's Armbruster said. Further rate rises will bolster the dollar, making all commodities priced in the U.S. currency more expensive, he said.
``We're seeing a little bit of air coming out of all the commodities right now, and oil in particular,'' Armbruster said, adding that he plans to sell oil in coming days. Should the futures fall through $51.50, they may decline into the high-$40s, regardless of the timing of further production rises promised by the Organization of Petroleum Exporting Countries, he said.
OPEC, which pumps 40 percent of the world's oil, decided at a meeting in Isfahan, Iran, last week to raise the production ceiling for 10 of its 11 members by 500,000 barrels a day to 27.5 million barrels a day. The group said it would consider adding another 500,000 barrels a day in coming weeks if prices stayed high.
Last Updated: March 23, 2005 19:36 EST
|
|
