August 6, 2004
HOUSTON (Reuters) - A fire forced the closure of a gasoline-producing unit at the third-largest refinery in the United States, sending oil prices to fresh record highs on concerns of potential disruptions to supplies.
News of the BP fire pushed global oil prices to fresh record highs, with U.S. light crude futures striking $44.77 a barrel and London's Brent crude hitting $41.50 a barrel early Friday.
The gasoline-producing ultracracker was shut at BP's 470,000-barrel-per-day (bpd) plant in Texas City, Texas, following a flash fire that was quickly extinguished Thursday, the Texas City Fire Department said.
Bill Stephens, spokesman for BP at Texas City, said all other operations at the plant were running normally but that it was unclear how long the unit would be shut. There were no injuries in the blaze.
The closure underlined the vulnerability of supplies as producers pump almost at full tilt to meet escalating global demand, leaving little leeway for any hiccup in the supply chain.
Earlier, Citgo Petroleum Corp. failed to restart a gasoline-producing fluidic catalytic cracking unit from a seven-day maintenance shutdown and sources close to the refinery operations said it may take another 10 days to restart the plant.
Citgo runs a 165,000-bpd Corpus Christi refinery in Texas.
FUEL STOCKS RISING
U.S. government data showed Wednesday that national gasoline stocks rose by 2.4 million barrels to 210.1 million barrels in the week to July 30, bringing inventories to a surplus of 8.3 million barrels compared with year ago levels.
Analysts said high fuel prices and sluggish economic growth had cooled U.S. gasoline consumption, which hits a peak in the summer vacation months.
Maintenance and repair contractors gathered at an exhibition in Houston on Thursday said refiners were not spending as much as expected of this year's record profits on upgrading plants.
Less spending on maintenance work increases the possibility of a plant breaking down at a time when U.S. refineries are running at 96.7 percent of capacity, according to the government data released earlier this week.
"The cost of oil's so high, they're running their refineries to make as much product as they can," said a refinery equipment supplier, who asked not to be identified. "They're putting off maintenance they should be doing to try and keep up."
http://money.cnn.com/2004/08/06/news/international/bp_texascity.reut/