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Oil Majors Rise As Motiva Refinery Outages Offer Price Support

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
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.

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]

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