Helping Colonials

Over the years, oil refineries along the US Northeast Coast have hit their share of economic potholes. Many of these plants were built around processing mainly light, low sulfur crude oils predominantly from West Africa. Until a few years ago, this limited menu of oil flavors still provided financial returns sufficient to warrant operating the refineries. Lately, however, escalating prices of Atlantic Basin light, low sulfur oils – along with a myriad of other factors – have squelched the profitability of these facilities. Refiners have sidelined some 510 kBD of capacity along the US Northeast Coast between 2010 and 2011 due to unsustainable economics. Another 330 kBD of Pennsylvanian capacity is targeted to join the sidelines this summer. If this closure occurs, the region’s refined product manufacturing capability could be trimmed by roughly 700 kBD. Even with their presently lackluster demand for oil products, markets in the Northeast would likely notice the shuttering of refining capacity totaling 840 kBD. Download here