Oil Majors Rise As Motiva Refinery Outages Offer Price Support

Michael Teague |

Production delays from refinery shutdowns at Motiva Enterprises LLC facilities are set to hamper production ahead of the Sept. 2 Labor Day holiday, as prices at the pump are already ticking up.

In mid-August news was that piping malfunctions at the US’s newest and largest crude distillation unit (CDU) at Motiva’s Port Arthur refinery would see production at 75,000 barrels per-day below capacity through fall of 2014. The company is also experiencing technical difficulties at another facility at Port Arthur, as well as at its Convent, Louisiana refinery, both of which will require their own carefully-timed shut-downs.

Gasoline slated for September delivery was just barely under $3 per gallon in midday trading on Thursday, while prices at the pump were up $0.1 to $3.53 per gallon just under two weeks away from the holiday. The shut-downs were ultimately the result of fires at both the Port Arthur and the Convent refineries, with the latter expected to be off-line through September for repairs.

The company has not given many details on the condition of its Port Arthur units, where two separate fires broke out within the period of a week this month, on Aug. 12 and Aug. 17. The Convent refinery fire took place on Aug. 19.

Major integrated oil and gas stocks fared very well in reaction to news of the production delays, and rose along with oil prices. Exxon Mobil (XOM) and Chevron (CVX) and BP (BP) were all up nearly 1 percent, while France’s Total SA (TOT) and Italy’s Eni SPA (E) were up slightly more than that ahead of the closing bell.

Royal Dutch Shell (RDS.A), who operates the Motiva refineries in conjunction with Saudi Aramco, was slightly in the red, down 0.03 percent.

Independent US producers also fared well, with significant increases for Occidental Petroleum (OXY) , EOG Resources (EOG) , Apache Corp. (APA) and Marathon Oil ($MRO).

[Image: Oil Refinery At Work, Courtesy of Flickr Creative Commons]

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CVX Chevron Corporation 113.00 -0.29 -0.26 6,167,368
TOT Total S.A. 47.78 0.03 0.06 1,338,219
MRO Marathon Oil Corporation 18.20 0.31 1.73 16,678,730
APA Apache Corporation 65.11 -0.03 -0.05 2,072,971
EOG EOG Resources Inc. 103.74 -1.01 -0.96 4,078,342
OXY Occidental Petroleum Corporation 70.85 -0.42 -0.59 4,153,338
XOM Exxon Mobil Corporation 87.04 -0.20 -0.23 9,706,646
E ENI S.p.A. 28.75 0.10 0.35 253,729
BP BP p.l.c. 35.48 0.09 0.25 5,205,923
ETHS Earthshine Intl Ltd n/a n/a n/a 0
RDSA Royal Dutch Shell Plc ADR Sponsored Repstg A Shs n/a n/a n/a 0

Comments

Emerging Growth

MGX Minerals Inc.

MGX Minerals is a diversified Canadian mining company listed on the Canadian Securities Exchange. MGX is engaged in the acquisition and development of industrial mineral deposits in western Canada that…

Private Markets

Wealthfront

Wealthfront is an automated investment service that serves as an alternative to traditional financial advisory services. The company manages a diversified, continually rebalanced portfolio of index funds on their clients’…

Pinterest

Pinterest is a visual discovery and planning tool. Users ("Pinners") use the site and apps to get ideas for their future, such as recipes, places to travel, and products to…