Bloomberg Oil Rises to Six-Month High on Equity Gain, Refinery Fire

May 19 (Bloomberg) -- Crude oil climbed to a six-month high and gasoline surged after equities rebounded and a fire broke out at a Flint Hills Resources LLC refinery, curbing production.

Oil and stocks rose a second day as gains in utilities and commodity producers helped the market overcome an early slide spurred by an unexpected drop in housing starts to a record low. The catalytic cracker caught fire at Flint Hills’ Corpus Christi, Texas, refinery, according to preliminary reports from the state’s environmental agency.

“The market was in negative territory until equities turned,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Gasoline has a bigger move, probably because of the fire at the Flint Hills refinery. This comes on top of problems at Valero and Sunoco.”

Crude oil for June delivery rose 62 cents, or 1.1 percent, to $59.65 a barrel at 2:50 p.m. on the New York Mercantile Exchange, the highest settlement since Nov. 10. Prices are up 34 percent this year.

The June crude contract expired today. The more-actively traded July contract climbed 51 cents, or 0.9 percent, to end the session at $60.10 a barrel.

The Flint Hills refinery has a capacity of 300,000 barrels of oil a day, according to data compiled by Bloomberg. A catalytic cracker is used to make higher-value products such as gasoline and diesel.

Preliminary Reports
“We have very preliminary reports that the cat cracker is what was on fire,” said Andrea Morrow, a spokeswoman for the Texas Commission for Environmental Quality. “We sent a team out there but haven’t heard anything further.” more...

Bloomberg Oil Rises to Six-Month High on Nigeria Threats, Refinery Fire

May 18 (Bloomberg) -- Crude oil rose to the highest close in six months after Nigerian militants threatened to block waterways used for energy exports and an explosion and fire at a Sunoco Inc. refinery affected operations.

The Movement for the Emancipation of the Niger Delta said that ships moving through the southern part of the country would be traveling at their own risk. Sunoco, the largest refiner in the Northeast, said the incident at the Marcus Hook plant, on the border of Pennsylvania and Delaware, took place yesterday.

“The situation in Nigeria is becoming increasingly unsettled,” said John Kilduff, senior vice president of energy at MF Global in New York. “The problems at the Sunoco refinery, which is a major supplier of gasoline to New York Harbor, are also giving the market a boost.”

Crude oil for June delivery rose $2.69, or 4.8 percent, to $59.03 a barrel at 2:43 p.m. on the New York Mercantile Exchange, the highest settlement since Nov. 11. Futures are up 32 percent this year.

The June crude contract expires tomorrow. The more-actively traded July contract increased $2.59, or 4.5 percent, to end the session $59.59 a barrel.

Gasoline for June delivery gained 7.75 cents, or 4.6 percent, to $1.7581 a gallon in New York, the highest settlement since Oct. 15.

Energy futures also climbed after U.S. equities increased on better-than-forecast earnings by Lowe’s Cos. and analysts recommended Bank of America Corp. The Standard & Poor’s 500 Index rose 2.5 percent to 905.18. The Dow Jones Industrial Average increased 2.5 percent to 8,471.98

Nigerian Fighting

Fighting in Nigeria has escalated since May 13 when militants said they responded to an army offensive by attacking military positions and hijacking a tanker.

MEND claimed responsibility yesterday for rupturing two pipelines supplying oil and natural gas from a Chevron Corp. facility to domestic refineries and power stations. The rebel group has threatened to blockade waterways in the southern region used for oil and gas exports.

Nigeria produces low-sulfur, or sweet, oil, prized by U.S. refiners because of the proportion of high-value gasoline and diesel it yields. more...