It was weekend of horror for drivers in the Midwest if they dare pulled up to the gas pump. A series of events conspired to create a historic gas price spike and ultimately a gas shock pop. The Enbridge pipeline delay was the icing on the cake as the market was suffering from a string of refining issues. It seems the Federal Government is not allowing Enbridge to restart until Enbridge submits a detailed restart plan and undergo a third-party audit. That in the aftermath of an announcement from the BP refinery fire in Whiting Indiana and a fire at Lemont created the perfect scenario for a price spike. Add to that surging oil price being driven mainly by stimulus hopes and a better than expected jobs number and storms in the Gulf of Mexico is enough to make a motorist scream.
Bloomberg News reported that the BP Whiting refinery began to shut its one crude unit for six to eight weeks of planned work, and expects a coker to be closed after a July 23 fire to be down three to five weeks more for repairs, a person with knowledge of operations said. The Shutting a crude unit safely can take several days, and once it's shut maintenance on the unit known as Pipe still 11A will begin, said the person, who declined to be identified because he isn't authorized to speak for the company. Several compressors are also being halted during the work.
The 420,000-barrel-a-day plant is the largest oil refinery serving the Chicago market. It is 17 miles (27 kilometers) south of Chicago and receives crude from Cushing, Oklahoma, via an 180,000-barrel-a-day pipeline, according to energy information provider Genscape Inc.
Add to that another refinery that is fed by that Enbridge pipeline was also shut. Reuters News reported that the Citgo Petroleum Corp reported a unit shutdown after an upset at its 167,000-barrel-per-day refinery in Lemont, Illinois that led to flaring late Friday, according to a notice filed with state pollution regulators. The unit was shut down, Citgo stated in its filing with the Illinois Emergency Management Agency said. Citgo is the U.S. refining subsidiary of Venezuela's state-owned oil company Petroleos de Venezuela SA.
Of Course oil was on fire as stocks soared apparently inebriated by a better than expected jobs number. Yet the real reason why the market rallied was because members of German Chancellor Angela Merkel's inner circle said that they would not stand in the way of ECB chief Mario Draghi plan to buy distressed European debt.
Of course oil shorts were worried to be short with all of the tropical weather threats in the Gulf of Mexico. It appears that the storms while still a threat will only slow imports. Last week we should have seen oil supply rebound! Look for crude supply to be up 3 million barrels, gas supply up 2millin barrels and distillate supply should be up 2.5 and refinery runs down 0.5.
You also have the Geo-political. Syria's Prime Minister defected to Jordan. Dow Jones reports a bomb strikes the main export pipeline carrying Iraqi crude oil from Kirkuk fields to the Turkish port of Ceyhan, cutting off flows and causing a huge fire, two Middle East shipping agents say.
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