18 January 2012 23:32 [Source: ICIS news]
HOUSTON (ICIS)--Higher gasoline prices caused by the shutdown of a refinery in the US Virgin Islands are expected to be shortl ived, an analyst said on Wednesday.
Gasoline prices spiked 5.41 cents/gal, settling at $2.8254/gal on Wednesday.
US-based Hess and Petroleos de Venezuela announced on Wednesday plans to permanently close their Hovensa joint venture St Croix refinery in the Virgin Islands in February.
“I don’t think it will affect gasoline prices much at all beyond the short term,” said analyst Patrick DeHaan with GasBuddy.com.
“This facility has been well known to be a poorly performing facility and has slowly been lowering production,” he added.
Hovensa cut capacity by 30% to 350,000 bbl/day in January 2011.
“I believe the psyche of seeing another refinery close is driving prices up today, but in the next week, we’ll see the issue off the minds and no longer making an impact,” said DeHaan.
Hovensa’s shutdown is the fourth of its kind for refineries serving the US since September 2011.
Sunoco’s 178,000 bbl/day Marcus Hook refinery and ConocoPhillips’ 185,000 bbl/day Trainer refinery, both in Pennsylvania, already have shut down. They will stay closed unless a buyer is found by April for Trainer and July for Marcus Hook.
Sunoco’s 335,000 bbl/day Philadelphia refinery in Pennsylvania also will shut down if no buyer is found by the summer.
“So right now we’re seeing [refineries] shut down one right after another,” said analyst Phil Flynn with PFGBest.
Flynn said fear in the market should be expected with yet another refinery shutting down.
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