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Petroleum industry

Crude and Product Prices Surge on Amoco Fire

Strategic Insights

— 1 min read

Washington - News of a fire at Amoco Corp.'s Texas City, Texas, refinery reinforced stronger technical indicators, causing crude and product prices to rise off their lows. The September crude contract on the New York Mercantile Exchange settled up 9 cents at $16.88/bbl, while gasoline prices shot up on news of the fire, settling up 1.21 cents at 53.26 cents/gallon in the August contract. The fire, which was extinguished but caused product to leak from the plant, lent support to crude prices late in the day.

Key Takeaways:

  • The September crude contract on the New York Mercantile Exchange settled up 9 cents at $16.88/bbl, largely due to the fire at Amoco's Texas City refinery.
  • Gasoline prices surged on news of the fire, settling up 1.21 cents at 53.26 cents/gallon in the August contract.
  • The fire caused product to leak from the plant, prompting a jump in gasoline prices on the Gulf Coast, with trades heard as high as 47.1 cents-47.3 cents.
  • September gasoline/crude crack spreads on Nymex firmed, ending the day at $5.18/bbl, up from Friday's $4.86.
  • Brent crude futures on London's International Petroleum Exchange edged higher, settling up 6 cents at $15.65/bbl on increased buying interest in the physical market.
  • Repair delays at Mobil Corp.'s Nigerian Qua Iboe terminal, due to a pipeline leak in mid-June, prompted interest in West African crude.
  • Analysts expressed caution about crude prices next week, citing several crude cargo arrivals, but others dismissed the concerns, saying most of the cargoes were spoken for and not distressed shipments.

Statistics:

  • September crude contract ended up 9 cents at $16.88/bbl.
  • August gasoline contract settled up 1.21 cents at 53.26 cents/gallon.
  • September gasoline/crude crack spreads on Nymex firmed to $5.18/bbl, up from Friday's $4.86.
  • Brent crude futures on London's International Petroleum Exchange settled up 6 cents at $15.65/bbl.
  • Amoco's 433,000 b/d refinery in Texas City caught fire.

Sources:

  • New York-based source
  • New York Mercantile Exchange (Nymex)
  • New York-based trader
  • Gulf Coast trader
  • Lori A. Courtney, analyst with New York-based Paribas Futures Inc.
  • International Petroleum Exchange
  • London's Brent crude futures

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