[merecat]

I still don't understand why refineries blowing up increases the price of oil?

http://news.bbc.co.uk/2/hi/business/4729657.stm#

If we hypothetically extrapolate and blow up all refineries then would that further increase the price of oil? It should only increase the price of gas (petrol) and other oil derivatives, not the price of oil, the price of oil should drop as a backlog forms that cannot be refined? What am I missing?

[DantesPeak]

Refinery accidents seem to be concentrated with the processing of sour or heavy crude. Actively trade futures and cash contracts are mostly for light or sweet crude. The loss of sour/heavy refining capacity forces buying of light/sweet crude.

Although the net amount of crude demanded may be the same, the price of light/sweet gains because of a delicate supply/demand situation for that type of product.

Other reasons may be that the impact may also be partly psychological, or the market may have over shot on the downside when the last piece of good news cam out - and is now correcting to the upside.

[merecat]

DantesPeak: Thanks for clarifying!

[DantesPeak]

Hmm no fire here, but Exxon was worried about a fire when it shut down its 240,000-barrel-per-day Joliet, Illinois, refinery Saturday because of a problem with a cooling-water system (not mentioned in story below).


$this->bbcode_second_pass_quote('', 'A') spate of refinery problems in the U.S. also resurrected concerns about meeting strong fuel demand.

Exxon Mobil (Research) added to the weekend anxiety as it shut down its 235,000 barrels per day Joliet refinery in Illinois, according to trade sources.

BP also shut down a gasoline-producing unit over the weekend at its giant Texas City refinery -- the third-largest in the United States and source of 3 percent of its gasoline -- for maintenance, a regulatory filing showed.

"Anytime we have refinery issues, the market just takes off again. We're back in the uptrend," Bentz said.

Although stockpiles of most fuels are relatively healthy for this time of year, traders fear refiners may be hard-pressed to satisfy rising summer motor fuel consumption while also stocking up enough distillate supplies to meet peak winter consumption.

[Cyrus]

$this->bbcode_second_pass_quote('', 'H')mm no fire here, but Exxon was worried about a fire when it shut down its 240,000-barrel-per-day Joliet, Illinois, refinery Saturday because of a problem with a cooling-water system (not mentioned in story below).

[Leanan]

CNN is covering a story now about a refinery in Louisiana that leaked some sort of foul-smelling, sulfuric gas. Seems like a fairly minor incident; two residents who felt sick were taken to the hospital. The sulfuric gas is the result of the process that removes sulfur from "sour" crude.

This refinery is the same one that suffered a fire a few weeks ago.

I think the theory that part of the refinery problem is the inferior grades of crude they are now forced to use just got a boost...

[The_Toecutter]

That company should pay for all their medical expenses plus compensation for all the damage to property and land that has ensued.

[BitterSweetCrude]

$this->bbcode_second_pass_quote('Leanan', 'C')NN is covering a story now about a refinery in Louisiana that leaked some sort of foul-smelling, sulfuric gas. Seems like a fairly minor incident; two residents who felt sick were taken to the hospital. The sulfuric gas is the result of the process that removes sulfur from "sour" crude.

This refinery is the same one that suffered a fire a few weeks ago.

I think the theory that part of the refinery problem is the inferior grades of crude they are now forced to use just got a boost...

[SD_Scott]

I could be totally wrong but it's probably not H2S. H2S is super deadly, and very quick to incapacitate. H2S also occurs naturally in crude oil.

[Leanan]

Yeek. Perhaps it was just at very, very low levels. Sounds like nasty stuff.

[SD_Scott]

Crude oil pipeline workers carry detectors with them at all times. It beeps, you run. My dad almost lost his life to H2S.

[BitterSweetCrude]

$this->bbcode_second_pass_quote('Leanan', 'Y')eek. Perhaps it was just at very, very low levels. Sounds like nasty stuff.

[BitterSweetCrude]

$this->bbcode_second_pass_quote('SD_Scott', 'C')rude oil pipeline workers carry detectors with them at all times. It beeps, you run. My dad almost lost his life to H2S.

[BabyPeanut]

Please post any refinery accents this year that you know of that are not on this list.

3-20-2005 Oil giant BP does not have catastrophe insurance cover for the Texas refinery explosion that claimed the lives of 15 workers and will have to foot the bill from its own resources. The disaster, which happened as contractors attempted to bring on-line a unit that had been closed for maintenance for several weeks, left 70 people injured. the explosion had affected the 12,000-acre refinery, which processes 470,000 barrels of oil a day.

7-20-2005 fire at Chevron's refinery in El Segundo. Chevron Corp. (CVX) has taken down the coker at its 260,000 barrel a day El Segundo refinery for unspecified maintenance, people familiar with the refinery's operations said Tuesday. The company is taking the opportunity to do maintenance now, because one of the refinery's two crude units is already out of service following a fire, one person said. That crude unit, the larger of the two, has a capacity of 150,000 barrels a day. The coker, downstream from the crude units, converts the heaviest portion of the crude to higher-value light products under high temperatures. The coker will be down as long as the crude unit is, the person said, but wouldn't specify how long either unit would be down or say what work is being performed. The crude unit was shut July 20, and traders believe it will be down for another two weeks. A Chevron spokesman wasn't available earlier to comment.

7-26-2005 an explosion shuttered a Russian refinery in Novo-Ufimsk.

7-28-2005 Murphy Oil Corp said it shut down a diesel fuel unit at its 120,000-barrel-a-day Meraux refinery. The fire was in the refinery's diesel hydrotreater, which removes sulfur from fuel. Murphy said damage to the unit was minimal, but offered no estimate of when it might restart.

7-28-2005 Smoke and flames once again erupted from BP's Texas City refinery Thursday, shaking windows and testing nerves still raw from an explosion four months ago that ranked as one of the deadliest industrial accidents in U.S. history. This time around no one was injured in the blast, which occurred around 6 p.m. in a part of the sprawling 1,200-acre complex far removed from the one that exploded in March. Thursday's explosion occurred in a part of the refinery called the Resid Hydrotreating Unit, which removes sulfur from heavy crude oil. When fully operational, the Texas City plant processes 3 percent of the nation's crude oil supply.

8-1-2005 Exxon Mobil added to the weekend anxiety as it shut down its 235,000 barrels per day Joliet refinery in Illinois, according to trade sources.

8-1-2005 BP also shut down a gasoline-producing unit over the weekend at its giant Texas City refinery -- the third-largest in the United States and source of 3 percent of its gasoline -- for maintenance, a regulatory filing showed.

8-11-2005 Strong explosions rocked a northern US chemical plant Tuesday night, sending fireballs and huge smoke columns high into the sky and prompting hundreds of people to evacuate their homes. The plant is located in Romulus, a suburban town near Detroit, some 640 km northwest of Washington DC, and the blasts happened shortly after 9 pm, according to local TV news reports. By Wednesday afternoon, flames and smoke are still rising from several tanks in the plant complex. The blasts occurred at a plant owned by EQ Resource Recovery Inc., which, according to its Web site, "specializes in fuel blending, chemical recycling, recoverable petroleum products, oil recycling and nonhazardous wastewater treatment services."

8-12-2005 A power outage has stopped production at the Memphis Premcor refinery, according to Reuters.

EDIT: additional incidents

8-15-2005 A sulphur dioxide gas leak at the Lousiana Murphy Oil USAMeraux refinery that caught fire on or about 7-28-2005.

[Leanan]

It was sulfur dioxide. Smells bad, but not too dangerous.

http://www.telegram.com/apps/pbcs.dll/a ... /508150919

[agni]

$this->bbcode_second_pass_quote('SD_Scott', 'C')rude oil pipeline workers carry detectors with them at all times. It beeps, you run. My dad almost lost his life to H2S.

[Bandidoz]

I'd like to know what the historical pattern of refinery shutdowns is; in other words, is the current pattern "ordinary"?

[CARVER]

7-14-2005 Shell Pernis (The Netherlands). The 416.000 barrel-per-day refinery had to be shut down because of a power disruption. 3 days later they started the controlled step-by-step startup which took several days to complete.

EDIT: I'm not sure if by now they have fully completed the startup. Last week (8-8-2005) there were still parts that had not started.

[pup55]

HOUSTON, Aug 5 (Reuters) - Leading independent U.S. refiner Valero Energy Corp. (VLO.N: Quote, Profile, Research) said on Friday gasoline and diesel production was cut at its 85,000 barrel per day (bpd) Ardmore, Oklahoma, refinery due to repairs on a 20,000 bpd naphtha reformer.
The unit is down for 14 days of repairs to fix catalyst circulation problems, the company said. Gasoline output is expected to be cut by 17,000 bpd and distillate production reduced by 15,000 bpd.

Reuters via Yahoo News

[UIUCstudent01]

$this->bbcode_second_pass_quote('Bandidoz', 'I')'d like to know what the historical pattern of refinery shutdowns is; in other words, is the current pattern "ordinary"?