WORLD OIL COMMODITY

THE OBJECTIVE OF THIS BLOG IS TO MANIFEST INDIGNATION TO THE LIES AND OPTIONS TAKEN BY GALP ENERGIA PORTUGALS PETROL COMPANY.

Monday, April 09, 2007

Refinery Outages

``The continuing spate of refinery outages and maintenance issues is pushing product prices higher and putting downward pressure on crude,'' said Eric Wittenauer, an energy analyst at A.G. Edwards & Sons Inc. in St. Louis. ``Until you see an up-tick in refinery operations, crude oil will have a hard time rising.
Motiva Enterprises LLC, the refining joint venture between Europe's Royal Dutch Shell Plc and Saudi Arabia's state oil company, reported a malfunction that occurred yesterday at its plant in Port Arthur, Texas. The Port Arthur refinery has a daily processing capacity of 285,000 barrels, according to the Energy Department.
The profit margin, or ``crack'' spread, for turning three barrels of crude oil into two barrels of gasoline and one of heating oil jumped 5.5 percent to $22.546, the highest since Sept. 29, 2005, based on closing futures prices in New York.
``It looks like we will be seeing a strong crack spread for a while,'' Ritterbusch said. ``It won't shrink a great deal until we see some strong evidence of increased refinery runs.''
Refiners Trim Output
Refineries in Texas, California, Pennsylvania, Colorado, Ontario and Delaware have had to trim output over the past two months. The closure of Valero Energy Corp.'s McKee refinery near Sunray, Texas, has contributed to the increase in supplies in Cushing. Increasing stockpiles in this oil hub have depressed the price of oil in New York compared with Brent oil.
``Prices here are depressed because the tanks in Cushing are full as a result of refinery problems,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``There's nowhere to put the oil. If someone could figure a way to ship the oil stuck in Cushing to the U.K. they would make a fortune.''
Brent crude oil for May settlement declined $1.66, or 2.4 percent, to $66.58 a barrel on the London-based ICE Futures exchange. Both the New York and London markets were shut on April 6 for the Good Friday holiday.
Uranium Enrichment
Iranian President Mahmoud Ahmadinejad said today that his country has begun enriching uranium on an industrial scale, stepping up defiance against the United Nations.
``Iran has succeeded in the nuclear-fuel-cycle development to attain production at an industrial level,'' Ahmadinejad said today at a ceremony at the Natanz uranium-enrichment site. He repeated that nuclear-fuel production was Iran's ``undeniable right'' and referred to ``a few powerful governments imposing their will on the rest,'' according to a broadcast of the speech.
The United Nations Security Council gave Iran 60 days from March 24 to suspend enrichment. The country already has ignored three UN deadlines to shut down production of the nuclear fuel. The UN demands were in response to allegations by the U.S. and some of its allies that Iran is using the development of nuclear power to disguise a weapons program. Iran denies that.
``We'll be keeping an eye on the news that Iran's nuclear production has reached an industrial level,'' said John Kilduff, vice president of risk management at Fimat USA in New York. ``This could perk up the market.''
The Strait of Hormuz is the world's most important oil transit chokepoint. Almost a quarter of the world's oil flows through the narrow waterway between Iran and Oman at the mouth of the Persian Gulf. Iran has the second-biggest proved oil reserves and is the second-biggest producer in the Organization of Petroleum Exporting Countries.

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