We all have a lot to be thankful for, especially if you are a commodity news junkie. It seems we have had a cornucopia of news and it just keeps giving. The petroleum markets were giving thanks for Secretary of State Hillary Clinton’s trip to the Middle East and the perhaps premature report of a cease fire deal. In fact it almost seemed that the markets gave up more than they got as they took a sharp drop. Yet as the day wore on it became less clear that a deal had been reached.
After reports of a deal, the rockets continued to fly and overnight there are disturbing report of a bus bomb. The AP reported that, "A bomb ripped through an Israeli bus near the nation's military headquarters in Tel Aviv on Wednesday, wounding at least 10 people, Israeli officials said.”
Oil also rebounded on what was a very bullish American Petroleum Institute supply report. The API sent prices spiking on a monstrous 4.8 million barrel drop in gasoline stocks. The biggest drop came in the Gulf Coast as refiner problems in Texas City and Borger City and supply displacement as the U.S. waved to Jones act to get more gasoline to the East Coast. The East Coast saw the next largest drop in supply as refiners and import terminals were struggling to get back to normal.
We did get some news on the refining front. Bloomberg News reported that a, "Phillips 66’s Bayway plant in New Jersey, the largest single refinery on the U.S. East Coast, will start producing fuel next week at the earliest, a person with direct knowledge of operations there said. The refinery may take until early December to return to full rates as equipment is brought back online sequentially, said the person, who asked not to be identified because the information isn’t public.
The plant was restoring cooling system water pumps yesterday and working to bring back steam before returning process units to service, the person said. The Bayway refinery was one of seven plants that halted production or cut rates as Hurricane Sandy struck the U.S. Northeast last month, shutting fuel terminals, pipelines and gas stations in its path. Bayway is the only refinery that remains shut since the storm. Dennis Nuss, a Phillips 66 spokesman at the company’s headquarters in Houston, said the company still expects the plant to return to normal operations “before the end of the month.” He declined to comment on when it will be producing at full capacity.
Sandy, which went ashore near Atlantic City, New Jersey, on Oct. 29, primarily damaged electrical equipment at Bayway, Phillips 66 said in a statement on its website on Nov. 5. Process units at the plant were “in good condition,” the company said at the time. The plant can process 238,000 barrels a day of feedstock, data compiled by Bloomberg show. Sunoco Inc.’s Philadelphia refinery, made up of two plants known as the Girard Point and Point Breeze sections, can run 355,000 barrels a day. Bloomberg also reported that Phillips 66 has extended work at its Borger, Texas, refinery at least a week and as long as two weeks because repairs were more difficult to make than anticipated, a person with knowledge of the situation said. Startup of the production units will take another two to three days after maintenance is complete, said the person, who declined to be identified because the information isn’t public. The work, which began on Sept. 22 after being delayed about 30 days, was scheduled to be completed this week, the person said.
About the Author
Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.
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