Closing Refineries Brings Higher Profits
According to an article published Friday by Bloomberg, oil refiners are processing 24 percent less fuel than this time last year. In order to stay profitable, they are looking to increase margins by shutting down East Coast refineries. So far, it has been successful; the difference between the price of crude and gasoline has widened recently.
After Valero shutting of its Delaware City facility and Sunoco’s indefinite closing of a New Jersey plant, refining capacity along the East Coast now stands at 1.32 million barrels per day.
The slashing of capacity could tilt heavily in favor of refiners; a delay in oil shipments or a sudden rise in demand could make a dent into inventory and cause prices – and profits – to rise. This scenario would obviously not be favorable to heating oil consumers.