August 1, 2012:

OAO Rosneft, Russia’s largest oil producer, conducted a review of its Komsomolsk refinery after local residents complained of a foul odor. The refinery is operating as usual and the government’s industrial watchdog hasn’t detected heightened levels of air pollutants, the company said today in a statement on its website. The Komsomolsk refinery is in Russia’s Far East and can process 160,000 barrels of crude a day, according to data compiled by Bloomberg.

By Bloomberg

August 1, 2012:

India's Hindustan Petroleum Corp 166,000 barrels per day (bpd) Vizag refinery in south India is undergoing partial maintenance which would likely last until September, industry sources said on Wednesday. They said that the state-owned refiner shut a 60,000 bpd crude distillation unit (CDU) and a fluid catalytic cracker at the refinery on July 28. The maintenance was initially scheduled for May-June but was later delayed to July-August period, traders said. The reason behind the delay is unclear. Traders said the shutdown of the units were likely the reasons prompting HPCL to import gasoline to plug the supply gap. It has bought up to 27,000 tonnes of gasoline from Gunvor for first-half August arrival at Vizag at premiums slightly below $10 a barrel to Singapore quotes on a cost-and-freight (C&F) basis. HPCL also operates a 130,000 bpd Mumbai refinery in western India.

By Reuters

August 1, 2012:

Phillips 66 reported a 14 percent jump in second quarter profits, benefiting from lower crude prices, in its first full period as an independent refiner, the company reported Wednesday. The Houston-based company, which spun off from ConocoPhillips in April, banked $1.2 billion in earnings, or $1.86 per share, over the three month period ending June 30. That compares to $1 billion, or $1.64 per share, for the same period in 2011. “We’re off to a solid start, running well in a positive margin environment,” said CEO Greg Garland. “The location of our domestic refining, midstream and chemicals facilities enabled us to access advantaged feedstocks, creating strong earnings and cash flow.”

Phillips 66 operates refineries across the U.S. and in Europe, as well as pipeline, processing and chemical facilities. Profits from the company’s refining division grew to $882 million, a 77 percent increase for the second quarter, largely fueled by stronger refining margins in Europe and the United States midcontinent region. Crude oil prices were boosted last year by political unrest and global economic concerns. Leaders credited the sale of the Trainer refinery in Pennsylvania to Delta Airlines, announced in April, for some of the improved financial results. The refinery largely operated on Brent-priced crude, which carries a heftier cost than domestic oil. Phillips 66’s pipeline and fuel storage segment reported $91 million loss. The division suffered a $170 million non-cash impairment of Phillips 66’s 25 percent interest in the Rockies Express Pipeline, a natural gas system from Colorado to Ohio. The company noted that the price of natural gas liquids has dropped 38 percent over the year as operating costs have risen.

Phillips 66’s investment in DCP Midstream, its natural gas processing joint venture with Spectra Energy, recorded a 53 percent drop in second quarter in earnings, banking a $42 million profit. While the system’s fuel volumes grew more than 5 percent in South Texas and Rocky Mountain areas, natural gas processing in the Gulf Coast declined, according to the company. Meanwhile, the company’s chemicals division benefited from lower prices of ethane and propane. Chevron Phillips Chemical, the company’s joint venture with Chevron, uses the natural gas liquids it purchases to make chemicals. The segment’s second quarter profits rose 9 percent to $207 million. The company also announced that it will repurchase of up to $1 billion of its outstanding common shares.

By Fuelfix

August 1, 2012:

State oil giant Saudi Aramco unexpectedly shut a secondary unit at its 305,000 barrels-per-day joint venture refinery in Jubail, which caused the refiner to offer a rare high sulphur gasoil cargo, industry sources said on Wednesday. The Saudi Aramco Shell Refinery Company (SASREF) in Jubail shut its hydrotreater unit about two or three days ago due to a "glitch" two sources familiar with the matter said. But details of the hydrotreater's capacity or the reason for the shutdown were not clear. Hydrotreaters are used to remove sulphur from high sulphur gasoil to make it a more environmentally friendly fuel. Saudi Aramco offered about 60,000 tonnes of 0.5 percent sulphur gasoil from the Jubail refinery for loading over August 18-20 through private negotiations, traders said. Bids for the cargo have to be submitted by Wednesday, they added.

Saudi Arabia is a net importer of lower sulphur diesel during summer when the fuel is used for power generation. The country has bought at least 750,000 tonnes for the whole of June and July this year. SASREF, which is a joint venture between Saudi Aramco and Shell Saudi Arabia Refining Ltd., last shut a hydrocracker unit at the Jubail refinery in late June-early July for a couple of days, traders have said earlier.

By Reuters

August 1, 2012:

Metro Detroit gas prices rose 7 cents Tuesday to $3.76 a gallon, according to AAA, the highest mark in about a month and a half with no relief for at least a week. The price is likely to increase further, and linger for days or weeks, because of problems with Midwestern refineries and a surge in the wholesale price of gasoline, industry experts said. BP's large refinery in northwest Indiana has a problem with an oil processing unit, while Phillips 66's Wood River, Ill., facility and Citgo's Lemont, Ill., refinery reported troubles over the weekend that will reduce supply, according to a blog at GasBuddy.com, a website where volunteers report gas prices at stations in Michigan and around the country. The three refineries produce nearly 15 million gallons of gas a day, according to GasBuddy, which helps motorists find inexpensive gas prices.

"This is a brief midsummer storm," Tom Kloza, chief oil analyst for Oil Price Information Service, said in a Tuesday email. "Your immediate future holds higher gas prices — perhaps even in the $3.75-$3.99 per gallon neighborhood for reformulated gas markets." That is because many retail markets haven't yet felt the effects of a 30-cents-a-gallon spike in the wholesale price of gas in the past eight days, Kloza said. GasBuddy Senior Petroleum Analyst Patrick DeHaan said in an email that higher prices will linger for at least a week or two, and will depend on when the refiners restore production. The Midwest and other markets are vulnerable to refinery interruptions because they keep just-in-time inventories of gasoline, "and no one wants to get caught with summer gas when demand drops," Kloza said.

But gas prices should drop in September when refineries switch from more expensive summer blends to cheaper winter fuels, he said. In the meantime, drivers should hope the refinery problems get repaired quickly. "By the time the Olympics are over (God willing!)" on Aug. 12, Kloza's message said, "you'll see lower numbers."

By Detroit News