Oil Refinery Woes

[Leigh Meyers <leighcmeyers@xxxxxxxxx>]

Refineries operating @ 95% utilization(capacity?) and the infrastructure 
(equipment & personnel) is crumbling. Fourteen (newsworthy) incidents 
since July 20. If only Cheney's energy group had perused the condition,
maps & plans for the refineries and infrastructure around Port Arthur TX 
instead of Kirkuk...

Refinery woes push oil prices to $67 a barrel
The New York Times, The Associated Press, Bloomberg News 
SATURDAY, AUGUST 13, 2005

http://www.iht.com/articles/2005/08/12/business/oil.php

LONDON Oil prices raced past $67 a barrel to a new high Friday as reports of U.S. refinery problems rekindled fears that gasoline supplies would struggle to meet rising demand in the United States. 

In late trading on the New York Mercantile Exchange, the crude oil for September delivery was quoted at $66.65, up 85 cents a barrel. Early in the session, the contract touched $67.10, a new high.

A series of refinery problems, an unusually active hurricane season in the Gulf of Mexico and concerns over Iran's decision to resume uranium conversion activities pushed prices upward, analysts said.

"There are clearly issues in both production and refining capacities because plants have been running so hard that accidents keep happening," said Richard Savage, global head of commodities research at Bank of America.

Refiners, which produce more gasoline in the summer to meet greater demand from motorists, have been operating at 95 percent utilization rates lately - a strain that has led to a string of shutdowns, accidents and fires. A disruption on Thursday at ConocoPhillips, the largest U.S. refiner, and a fire at a Sunoco pipeline in Texas were among at least 14 incidents reported since July 20. 

Also, new data suggesting that oil output from Russia might slow added to concerns. Most members of the Organization of Petroleum Exporting Countries are producing at maximum capacity.

"The market is so bullish that it's in accelerator mode," said Thomas Bentz, an analyst with BNP Paribas in New York. "It's feeding on itself; $70 looks like an achievable target without too much difficulty."

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