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BP Washington refinery fire seen drawing cargoes, lifting prices
February 19, 2012 / 11:06 PM / 6 years ago

BP Washington refinery fire seen drawing cargoes, lifting prices

* Pacific Northwest gasoline may jump 20 cts -analyst

* Cargoes already headed to West Coast on Calif prices

HOUSTON, Feb 19 (Reuters) - A Friday fire that idled BP Plc’s 225,000 barrel per day (bpd) Cherry Point, Washington, refinery was expected by market analysts on Sunday to lift gasoline prices on the U.S. West Coast in the coming weeks.

More tankers loaded with gasoline were also expected to move to the West Coast because of the idled BP plant, which is the third largest refinery in the region. Cargoes from Asian refineries are already said to be headed to the West Coast due to high fuel prices in California.

“The arbitrage to the West Coast is already open,” said David Hackett, president of Stillwater Associates, an transportation energy consulting firm in Irvine, California. “Some cargoes now headed for California might end up going to the Pacific Northwest.”

Wholesale gasoline prices finished in the Los Angeles market on Friday at 33.5 cents a gallon over March NYMEX RBOB gasoline while gasoline in the Pacific Northwest market finished at 7 cents a gallon over the March NYMEX contract.

By Tuesday, the premium for gasoline in the region could be approaching the Los Angeles level, said petroleum industry analyst Bob van der Valk of Terry, Montana.

“I think it will have a major impact,” van der Valk said. “I see Portland-Seattle market prices jumping between 15 and 20 cents a gallon.”

Consumers may not feel the price increase from the idled refinery right away, said the head of Washington state’s gasoline retailers association. Service stations in the region were hit with a 15-cent per gallon increase due to higher crude prices last week. Retail prices were up about 10 cents a gallon in the Seattle area as of Sunday.

“You have to assume the price is going up, how long it takes is the question,” said Tim Hamilton, executive director of the Automotive United Trades Organization.

On Sunday, BP was assessing damage from the 1-hour fire Friday that shut the Cherry Point refinery’s crude distillation unit, said BP spokesman Scott Dean. The refinery’s other production units were idled in warm standby mode due to the crude unit shutdown.

The refinery’s supply and logistics staff were also working to identify replacement supplies of refined products so BP can meet its contractual obligations, Dean said.

West Coast gasoline inventories retreated 248,000 barrels during the week of Feb 10 to 31.56 million barrels, in the most recent report compiled by the U.S. Energy Information Administration.

In California, gasoline stockpiles fell 228,000 barrels last week to 6.186 million barrels, according to the California Energy Commission.

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