Texas: Heating Oil, Gasoline Rise on Delay of Refinery Unit Restart

Heating Oil, Gasoline Rise on Delay of Refinery Unit Restart New York, April 17 (Bloomberg) -- Heating oil and gasoline futures rose after Motiva Enterprises LLC said a unit at its Port Arthur, Texas, refinery would be closed longer than expected for repairs, reducing output of oil products.

The unit, known as a fluid catalytic cracker, could remain shut at least until late next week, the company said. The unit had been expected to reopen late this week. The unit, which has the capacity to process l83,000 barrels of oil products a day, was closed on March 29.

``Motiva could be down until early May,'' said Ric Navy, a broker at Paribas Futures Inc. in New York. Production will be reduced at a time when ``heating oil has been tight for the past couple weeks,'' he said.

Heating oil for May delivery rose as much as 2.80 cents, or 4.2 percent, to 69.20 cents a gallon on the New York Mercantile Exchange. Gasoline for May delivery rose as much as 1.23 cents, or 1.5 percent, to 81.05 cents a gallon.

Also boosting prices was the closing Friday of a unit at Valero Energy Corp.'s Corpus Christi, Texas, refinery for unscheduled maintenance. The company said today it would restart that unit on Saturday.

The outages come at a time when refineries need to boost production of gasoline to meet peak demand during the summer driving season. U.S. refineries need to process an additional 1 million barrels of crude oil a day during the second quarter to meet the increased demand, the London-based Centre for Global Energy Studies said today in a monthly report.

Members of the Organization of Petroleum Exporting Countries, which have seen crude oil prices drop by one-fourth from a nine- year high March 8, ``should not panic. Prices will recover once refiners start buying again,'' the report said.

Crude oil for May delivery recently was up 20 cents at $25.77 a barrel on the Nymex. In London, June Brent crude was up 32 cents at $22.73 a barrel.

Heating oil prices rose 2.5 percent last week, partly on expectations for increased demand for diesel from farmers engaged in spring planting. Diesel and heating oil are similar products and often trade in tandem.

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-- Carl Jenkins (Somewherepress@aol.com), April 17, 2000