US Gulf refinery rates exceed 90%, export demand strong − Fed

28 November 2012 23:13  [Source: ICIS news]

HOUSTON (ICIS)--Refiners along the US Gulf coast are operating at rates exceeding 90%, and strong foreign demand is preventing refined-product inventories from growing, the US Federal Reserve said on Wednesday.

For petrochemicals, production was up slightly, but companies had cautious outlooks because of uncertainty, the Fed said in its Beige Book, a summary of economic activity among the 12 Federal Reserve districts.

In the 11th district based in Dallas, Texas, activity in the energy sector remained high, the Fed said. The rig count had declined, but this was mostly related to natural gas.

For oil, recent price declines and volatility are discouraging producers from drilling in higher cost fields, the Fed said.  

However, oil prices remain high enough to support current activity, which should remain steady for the rest of the year before increasing in 2013, the Fed said.

For all of the US, economic activity expanded at a measured pace during the past several weeks, the Fed said. However, some are worried about the so-called fiscal cliff.

The fiscal cliff is the increase in US income tax rates and sharp cuts in federal government spending that will kick in on 1 January. 

The rate increases and spending cuts are mandatory, unless the White House and Congress can engineer a budget resolution in the next few weeks to eliminate most, if not all, of the mandated tax hikes and spending reductions.

Meanwhile, consumer spending grew modestly while manufacturing weakened, the Fed said. Both residential and commercial real estate grew slightly in several districts.

By: Al Greenwood
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