While Deutsche Bank (NYSE:DB) believes the refining industry needs to be shrunk in the U.S., there is good news for companies like Marathon (NYSE:MRI) and Holly (NYSE:HOC) serving in that capacity, as margins are up and earnings will follow as a result.
Both companies were upgraded to "Buy" on enhanced margins.
Deutsche Bank said, "Demand is weak and expected to never attain its previous peaks; but more refining capacity has been added. The need is to retire refineries, a slow and painful aging process for a twilight industry. However in this note we list the many positive factors that have driven US refining margins, particularly in the MidCon, towards the upper end of the 2000-2010 range. Long MidCon: Raise Marathon to BUY, Holly to BUY, re-iterate ConocoPhillips (NYSE:COP) BUY, Frontier (NYSE:FTO) BUY, CVR Energy (NYSE:CVI) BUY."
It seems Deutsche is wrong concerning oil refinery capacity, which has caused problems in the past in the U.S. when a number of them were shut down.
Showing posts with label Oil Refinery. Show all posts
Showing posts with label Oil Refinery. Show all posts
Tuesday, October 26, 2010
Monday, October 18, 2010
French Oil Workers Continue Strike Over Retirement Age
After ignoring an order by the French government to get back to work, oil workers in the country stepped up their battle against an increase in the retirement age to 62, setting tires on fire at an oil refinery just outside of Paris.
Close to a dozen oil refineries in France have been blocked by residents and workers in order to keep workers from entering into the plants to reopen them. Oil depots have also been blockaded by human chains.
Intervention of some sort is expected from the government as Prime Minister Francois Fillon said on Sunday they'll do whatever it take to be sure there aren't fuel shortages in the country.
At this time there are fuel shortages in some places scattered around the country, but it'll get much worse if the protests are allowed to go on.
There are approximately a month of oil reserves left in the country.
Concerns that truckers would join the protests were confirmed Monday, as they started organized slowdowns in order to bring traffic to almost a halt, riding at extremely slow speeds.
Close to a dozen oil refineries in France have been blocked by residents and workers in order to keep workers from entering into the plants to reopen them. Oil depots have also been blockaded by human chains.
Intervention of some sort is expected from the government as Prime Minister Francois Fillon said on Sunday they'll do whatever it take to be sure there aren't fuel shortages in the country.
At this time there are fuel shortages in some places scattered around the country, but it'll get much worse if the protests are allowed to go on.
There are approximately a month of oil reserves left in the country.
Concerns that truckers would join the protests were confirmed Monday, as they started organized slowdowns in order to bring traffic to almost a halt, riding at extremely slow speeds.
Monday, October 11, 2010
BP (NYSE:BP) Chooses H2Scan for Refinery Analyzers
H2Scan was chosen by BP Plc (NYSE:BP) to supply analyzers for its Cherry Point refinery in Washington State.
President and CEO of H2can, Dennis Reid, was extremely happy about winning the contract. He said, “The process has been seamless and we are on schedule to deliver the full multi-analyzer and control system on-time.”
The analyzers provided by H2Scan will through their design save a lot of space in the existing analyzer shelters, and are able to function as they should without the need of continual calibration and valve switching. They measure in real time.
H2Scan won the bidding process based on pricing, performance and it's ability to be maintained.
President and CEO of H2can, Dennis Reid, was extremely happy about winning the contract. He said, “The process has been seamless and we are on schedule to deliver the full multi-analyzer and control system on-time.”
The analyzers provided by H2Scan will through their design save a lot of space in the existing analyzer shelters, and are able to function as they should without the need of continual calibration and valve switching. They measure in real time.
H2Scan won the bidding process based on pricing, performance and it's ability to be maintained.
Thursday, October 7, 2010
Exxon (NYSE:XOM) Louisiana Refinery Has Hydrogen Sulfide Leak
Hydrogen sulfide, a hazardous material which in high concentrations can result in death, is leaking from an Exxon refinery in Chalmette, Louisiana.
In low concentrations the results can “irritate the eyes, nose, throat and respiratory system,” according to the Occupational Safety & Health Administration (OSHA).
Exxon said the levels being monitored aren't harmful at this time.
The leak, which evidently started on Wednesday, was attempted to be kept from going offsite by creating what was identified as a "large water curtain," according to a Bloomberg report.
It wasn't known if the death of a contractor at the refinery yesterday was connected to the leak.
In low concentrations the results can “irritate the eyes, nose, throat and respiratory system,” according to the Occupational Safety & Health Administration (OSHA).
Exxon said the levels being monitored aren't harmful at this time.
The leak, which evidently started on Wednesday, was attempted to be kept from going offsite by creating what was identified as a "large water curtain," according to a Bloomberg report.
It wasn't known if the death of a contractor at the refinery yesterday was connected to the leak.
Wednesday, October 6, 2010
Exxon (NYSE:XOM) May Sell Japanese Gas Stations
Exxon Mobil Corp. (NYSE:XOM) is reportedly thinking about selling some gas stations on the Japanese island of Kyushu, among the main islands of the country, according to the Nikkei.
The company said, "Exxon is looking into new measures such as changing the ownership of service stations there."
Even so, Exxon says they will keep on supporting its retail operations in Japan.
The Nikkei also recently reported Exxon is considering cutting back on oil-refining capacity in Japan by close to 20 percent, based on slowing demand.
Exxon has responded to some reports which asserted they were leaving the Japanese market altogether, which the oil giant says isn't the case.
The company said, "Exxon is looking into new measures such as changing the ownership of service stations there."
Even so, Exxon says they will keep on supporting its retail operations in Japan.
The Nikkei also recently reported Exxon is considering cutting back on oil-refining capacity in Japan by close to 20 percent, based on slowing demand.
Exxon has responded to some reports which asserted they were leaving the Japanese market altogether, which the oil giant says isn't the case.
Friday, September 17, 2010
Enbridge (NYSE:ENB) Reopens Pipeline
After finding a leak on September in one of their pipelines and ultimately having to shut it down, Enbridge Energy Partners (NYSE:ENB) announced today it has now been reopened, again transporting crude oil from Canada to Illinois refineries.
The pipeline, which at full capacity can move up to 670,000 barrels of oil daily, reportedly provides close to 70 percent of the capacity for Chicago-area refineries.
Gas prices soared by as much as 15 cents a gallon in response to the shutting down of the pipeline.
The leak happened in the Chicago suburb of Romeoville, releasing about 6,100 barrels into the area before shutting it down.
The pipeline, which at full capacity can move up to 670,000 barrels of oil daily, reportedly provides close to 70 percent of the capacity for Chicago-area refineries.
Gas prices soared by as much as 15 cents a gallon in response to the shutting down of the pipeline.
The leak happened in the Chicago suburb of Romeoville, releasing about 6,100 barrels into the area before shutting it down.
Exxon (NYSE:XOM) Affected by Enbridge (NYSE:ENB) Pipeline Stoppage
Exxon Mobil Corp. (NYSE:XOM) said through a spokesman that the shut down of the oil pipeline of Enbridge (NYSE:ENB) has affected their operations.
Specifically impacted by the oil leak was Exxon's Joliet, Illinois refinery, which produces 238,600 barrels a day.
While there are challenges to solve the problem, Exxon spokesman Kevin Allexon said the refinery "continues to operate and we've made alternative crude supply arrangements. We expect to meet our contractual commitments for transportation fuels."
Exxon closed Thursday at $60.97, dropping $0.03, or 0.05 percent.
Specifically impacted by the oil leak was Exxon's Joliet, Illinois refinery, which produces 238,600 barrels a day.
While there are challenges to solve the problem, Exxon spokesman Kevin Allexon said the refinery "continues to operate and we've made alternative crude supply arrangements. We expect to meet our contractual commitments for transportation fuels."
Exxon closed Thursday at $60.97, dropping $0.03, or 0.05 percent.
Tuesday, September 14, 2010
Exxon (NYSE:XOM), BP (NYSE:BP), Chevron (NYSE:CVX) Major Part of $700 Billion American Refining Industry
The combination of approximately 90 petroleum refining companies in the U.S. generate about $700 billion in revenue, include majors like Chevron (NYSE:CVX), ExxonMobil (NYSE:XOM) and BP (NYSE:BP).
Close to 60 percent of all refining capacity in the U.S. is held by the eight largest refiners, according to a report from Research and Markets.
The annual revenue generated by the industry is volatile, and dependent on the average price of oil throughout the year.
Surprisingly, location is a big factor in the competitiveness of smaller refiners, who can are able to go head to head with their larger competitors if they are run well and are in the right markets.
Specialty products is also a key element of the success of the smaller refiners.
Operational costs are relatively low because of the industry being largely automated, with annual revenue for each worker coming in at over $7 million.
Larger operations can and do compete on scale, although operational costs are important, as in all businesses.
Close to 60 percent of all refining capacity in the U.S. is held by the eight largest refiners, according to a report from Research and Markets.
The annual revenue generated by the industry is volatile, and dependent on the average price of oil throughout the year.
Surprisingly, location is a big factor in the competitiveness of smaller refiners, who can are able to go head to head with their larger competitors if they are run well and are in the right markets.
Specialty products is also a key element of the success of the smaller refiners.
Operational costs are relatively low because of the industry being largely automated, with annual revenue for each worker coming in at over $7 million.
Larger operations can and do compete on scale, although operational costs are important, as in all businesses.
Wednesday, May 19, 2010
Marathon Oil (NYSE:MRO) Selling Assets in Minnesota
Marathon Oil (NYSE:MRO) announced it'll be selling most of its retail and refining assets in Minnesota, signing a nonbinding letter of intent.
In a deal valued at over $800 million, three investment firms are buying the assets from the giant oil firm. The three private investment firms are Acon Investments LLC, NTR Partners LLC and TPG Capital LP.
Assets to be sold include it interests in piplines, 166 SuperAmerica convenience stores, and a refinery and terminal located in St. Paul Park.
In the midst of selling off some of its overseas holdings, Marathon says they should complete the sale in either the third or fourth quarter.
The major reason behind the sale, and others, is to help pay for their capital expenditures, which have reached pretty high levels.
In a deal valued at over $800 million, three investment firms are buying the assets from the giant oil firm. The three private investment firms are Acon Investments LLC, NTR Partners LLC and TPG Capital LP.
Assets to be sold include it interests in piplines, 166 SuperAmerica convenience stores, and a refinery and terminal located in St. Paul Park.
In the midst of selling off some of its overseas holdings, Marathon says they should complete the sale in either the third or fourth quarter.
The major reason behind the sale, and others, is to help pay for their capital expenditures, which have reached pretty high levels.
Saturday, April 10, 2010
Oil Slumps on Higher Inventories
Oil prices dropped after oil inventory has risen for the 10th straight week.
Prices for May delivery fell to $84.92, a 47 percent decline on Friday. After reaching 17-month high of almost $87 a barrel on Tuesday, prices have fallen $2 a barrel since then.
Taking into account the 10 straight weeks of oil inventory rising, and the 17-year high supply of gasoline, and there's sure to be downward pressure on prices in the next week or two, depending on how long the supply remains high and demand low.
Still, refiners continue to pump out crude oil at increased levels, which consumers will ultimately appreciate as they consider how much they're going to travel this year and whether they're going to stay closer to home.
Prices for May delivery fell to $84.92, a 47 percent decline on Friday. After reaching 17-month high of almost $87 a barrel on Tuesday, prices have fallen $2 a barrel since then.
Taking into account the 10 straight weeks of oil inventory rising, and the 17-year high supply of gasoline, and there's sure to be downward pressure on prices in the next week or two, depending on how long the supply remains high and demand low.
Still, refiners continue to pump out crude oil at increased levels, which consumers will ultimately appreciate as they consider how much they're going to travel this year and whether they're going to stay closer to home.
Tuesday, February 3, 2009
Oil Refinery Workers New Labor Contract
Union negotiators for oil refinery workers have tentatively agreed to a new contract which represents approximately 24,000 union members.
The new contract deals with labor issues like wage and benefit levels, which the details of the agreement weren't released.
If there had been a strike, it would have affected up to 10 percent of the overall refining capacity in America's oil industry. Other reports say the strike could have affected close to two-thirds of the capacity to make fuels in general, gasoline and diesel.
Details of the oil refinery workers deal will be released sometime on Wednesday by their representatives of the United Steelworkers union. Signing off on the deal was the National Oil Policy Committee, which still has to be ratified by local union units.
Some of the large oil and gas companies that would have been affected by the strike were Exxon Mobil (nyse:XOM), Royal Dutch Shell (nyse: RDSA), BP (nyse:BP) PLC, Valero (nyse:VLO), and Chevron (nyse:CVX), of close to 60 oil producers in general.
Besides higher wages, other issues being negotiated for the oil refinery workers were cost-of-living increases and full benefits for medical, dental and vision; both for current and retired oil workers.
The deal was worked out with Shell Oil, which will also be extended to the other plants, including Valero Energy Corp., Exxon Mobil Corp., Chevron and BP Plc. The deal, if approved, will keep up to six refinery plants from closing, and about 1.7 barrels a day from going off line.
Some of the known parts of the contract are a three percent raise for each of the three years of the contract, along with a signing bonus of $2,500 if it is approved before February 16.
Fuel and oil demand has fallen so much that the refineries have slowed production after falling prices put downward pressure on margins. Oil processors have had a record number of days of making gasoline at a loss, measured by futures prices.
The two largest refiners in America, ConocoPhillips and Valero were leading the fuel production cut in oil refinery output.
Gas prices had surged by 10 percent last week as the possibility of a strike loomed over the oil and oil refinery industry.
On the New York Mercantile Exchange, gasoline for March delivery increased 1.68 cents to $1.166 a gallon. Gas prices across the nation grew to $1.89 a gallon according to AAA.
Now that a strike is probably averted, we should see a corresponding fall in gasoline prices as demand continues to fall.
If things do change economically, this new contract could be a diaster for union members, as higher operating costs through increased wages and benefits could put many oil refinery workers out of a job in the months ahead. But that's how unions always work, as they overreach and cause loss of jobs, while benefitting only some of the members.
For the week ending January 16, oil refinery production had operated at 82.5 percent of capacity, down significantly from the 85.2 percent the week before. It'll a long time before gas and oil demand increase in any major way.
Motorists in the U.S. continue to drive much less, as for the second year they've driven at a lower rate than the previous year. According to the Federal Highway Administration, vehicle miles have plunged by 5.3 percent or 12.9 billion miles. We should see that continue on, and oil refineries operating at even less capacity before it turns around.
The new contract deals with labor issues like wage and benefit levels, which the details of the agreement weren't released.
If there had been a strike, it would have affected up to 10 percent of the overall refining capacity in America's oil industry. Other reports say the strike could have affected close to two-thirds of the capacity to make fuels in general, gasoline and diesel.
Details of the oil refinery workers deal will be released sometime on Wednesday by their representatives of the United Steelworkers union. Signing off on the deal was the National Oil Policy Committee, which still has to be ratified by local union units.
Some of the large oil and gas companies that would have been affected by the strike were Exxon Mobil (nyse:XOM), Royal Dutch Shell (nyse: RDSA), BP (nyse:BP) PLC, Valero (nyse:VLO), and Chevron (nyse:CVX), of close to 60 oil producers in general.
Besides higher wages, other issues being negotiated for the oil refinery workers were cost-of-living increases and full benefits for medical, dental and vision; both for current and retired oil workers.
The deal was worked out with Shell Oil, which will also be extended to the other plants, including Valero Energy Corp., Exxon Mobil Corp., Chevron and BP Plc. The deal, if approved, will keep up to six refinery plants from closing, and about 1.7 barrels a day from going off line.
Some of the known parts of the contract are a three percent raise for each of the three years of the contract, along with a signing bonus of $2,500 if it is approved before February 16.
Fuel and oil demand has fallen so much that the refineries have slowed production after falling prices put downward pressure on margins. Oil processors have had a record number of days of making gasoline at a loss, measured by futures prices.
The two largest refiners in America, ConocoPhillips and Valero were leading the fuel production cut in oil refinery output.
Gas prices had surged by 10 percent last week as the possibility of a strike loomed over the oil and oil refinery industry.
On the New York Mercantile Exchange, gasoline for March delivery increased 1.68 cents to $1.166 a gallon. Gas prices across the nation grew to $1.89 a gallon according to AAA.
Now that a strike is probably averted, we should see a corresponding fall in gasoline prices as demand continues to fall.
If things do change economically, this new contract could be a diaster for union members, as higher operating costs through increased wages and benefits could put many oil refinery workers out of a job in the months ahead. But that's how unions always work, as they overreach and cause loss of jobs, while benefitting only some of the members.
For the week ending January 16, oil refinery production had operated at 82.5 percent of capacity, down significantly from the 85.2 percent the week before. It'll a long time before gas and oil demand increase in any major way.
Motorists in the U.S. continue to drive much less, as for the second year they've driven at a lower rate than the previous year. According to the Federal Highway Administration, vehicle miles have plunged by 5.3 percent or 12.9 billion miles. We should see that continue on, and oil refineries operating at even less capacity before it turns around.
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