26 December 2002
Oil refiners' profits surge in crisis
NEW YORK, N.Y. - For the several oil importers and refiners in the United States who depend on Venezuelan crude, times are tough. The rest are enjoying surging profits during this Yuletide.
U.S. refining profit margins rose for the third consecutive week as a strike in Venezuela crippled its crude and product exports to the United States, according to Reuters and Salomon Smith Barney.
While a few refiners that depend heavily on Venezuelan crude have been forced to cut runs or pay up for alternative supply, firms that have secure feedstock have benefited.
Average U.S. gross refining profit margins gained 53 cents to $4.08 for each barrel of crude oil distilled in the week ended Dec. 21, and $1.18 since Nov 30, just days before a general national strike hit key exporter Venezuela.
The 23-day-old strike in protest of Venezuelan President Hugo Chavez has paralyzed the OPEC-member's 1.3 million barrels per day of refinery output and 3.1 million bpd of crude production, thinning U.S. imports and forcing run cuts at domestic refineries that depend on Venezuelan crude.
The action has cut crude and petroleum product supplies to the United States by about 13 percent as demand surges for winter heating.
Three U.S. refiners have already had to significantly cut fuel production ahead of peak winter demand season due to the shortfall in Venezuelan crude, including Hovensa in the U.S. Virgin Islands, Lyondell-Citgo in Pasadena, Texas, and ConocoPhillips in Sweeny, Texas.
The resulting drawdowns in U.S. fuel stockpiles has been a boon to refiners with secure feedstock.
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