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 116.28 -0.10 -0.09 4,663,094
TOT Total S.A. 51.51 -0.08 -0.16 4,583,097
MRO Marathon Oil Corporation 17.44 -0.01 -0.06 6,855,442
APA Apache Corporation 63.10 0.32 0.51 3,535,940
EOG EOG Resources Inc. 105.48 0.09 0.09 3,879,089
OXY Occidental Petroleum Corporation 69.73 0.65 0.94 3,773,621
XOM Exxon Mobil Corporation 87.36 1.01 1.17 13,198,316
E ENI S.p.A. 33.05 -0.10 -0.30 373,190
BP BP p.l.c. 37.44 -0.22 -0.58 6,172,836
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

Reliq Health Technologies Inc.

Moseda Technologies Inc provides mobile and IT cloud computing to increase operational efficiency and security. It develops SmartFleet, a solution designed for commercial use, as well as SmartCare, a mHealth…

Private Markets

XY Find It

Founded by serial entrepreneur Arie Trouw, XY Findables follows a single guiding principle: customers should never lose anything important again. With over 50,000 users around the world, more than 100,000…

D-Wave

D-Wave Systems is the first quantum computing company. Its mission is to integrate new discoveries in physics, engineering, manufacturing, and computer science into breakthrough approaches to computation to help solve…