Tags: hess | us | gasoline | refining

Hess Refining Exit Seen Unlikely to Spur US Gasoline Imports

Monday, 28 Jan 2013 12:36 PM

 

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Hess Corp.’s plan to exit oil refining, including closing a plant with a daily capacity of 70,000 barrels, is unlikely to spur imports of European gasoline into the U.S., analysts said.

The withdrawal probably won’t stop a decline in flows of the auto fuel across the Atlantic, according to Ehsan Ul-Haq, senior market consultant at KBC Energy Economics in Walton-on- Thames, England. Refiners in the U.S. and the Caribbean will replace lost capacity, said Bjorn Kristian Roed, an analyst at Danske Markets in Copenhagen.

“I do not see any long-term arbitrage opening up due to this that should stimulate increased Europe-U.S. product trade,” Roed said by e-mail. “I do not expect a significant shortage of refineries to have a significant impact on U.S. prices that will make us see increased European imports” of gasoline, he said.

The refinery in Port Reading, New Jersey, is scheduled to shut by the end of next month, New York-based Hess said today in a statement. If the plant were sold to another operator, continued production might further discourage gasoline imports, Ul-Haq said by e-mail.

Daily earnings for tankers plying the trans-Atlantic route rose 1.4 percent to $17,404, figures from the London-based Baltic Exchange showed today. That was the third gain in a row after nine straight drops. Returns are down 22 percent from this year’s high on Jan. 10.

Gasoline for delivery in February climbed 2.3 percent to $2.9405 a gallon on the New York Mercantile Exchange at 5 p.m. London time. A close at that price would be the biggest climb since Dec. 26.

© Copyright 2014 Bloomberg News. All rights reserved.

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