At least one Midwestern refinery is said to be considering a delay in maintenance work after trouble at BP Plc’s Whiting plant near Chicago sent regional profit margins to a seven-year high.
Phillips 66 is weighing the postponement of a planned September turnaround at its Wood River, Illinois, refinery by several weeks, people familiar with the deliberations said. The Energy Information Administration estimated Tuesday that as much as 140,000 barrels a day of gasoline output is being lost after leaks at the biggest crude unit in the Whiting refinery reduced operations there.
“Given how strong margins are, it wouldn’t be surprising to see some of the refinery maintenance by other refineries being pushed back by at least a week,” Amrita Sen, chief oil analyst at Energy Aspects, a London-based energy consultancy, said in a phone interview.
Tempting refiners to rethink the tradition of doing repairs after the peak gasoline season wanes in September are profit margins that reached $50.48 in the Chicago area on Aug. 12, the highest since September 2008. On the same day, the spread between gasoline and oil traded in New York was $30.73. A decline to a $38.19 margin in Chicago on Tuesday still leaves the regional spread at its highest in more than two years.
At least six other Midwest refineries have scheduled maintenance to begin over the next two months, including Marathon Petroleum Corp.’s unit in Catlettsburg, Kentucky. Whiting itself, already missing 235,000 barrels a day of capacity, is scheduled to shut a second crude unit in September, people familiar with the plans said.
Sen estimates that crude capacity in the Midwest has been scheduled to drop 530,000 barrels a day in September and 660,000 barrels in October.
Pump Prices
Any delays in fall maintenance could benefit consumers. Regular gasoline in Chicago has jumped 25 percent in a week to $3.455 a gallon, according to according to AAA, the nation’s largest motoring group.
“The pressure is high because the refining margin is good and refiners have to serve the consumers who are struggling with this spike in gasoline prices,” Phil Flynn, senior energy analyst at Price Futures Group in Chicago. “They will face political pressure as people ask ‘‘why are you going into maintenance when we have a major refinery shutdown?’’
BP’s 405,000 barrel-a-day Whiting refinery, 20 miles southeast of Chicago, is running at minimal rates and its big crude unit could be shut at least a month for repairs, people familiar with operations say.
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