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By ANGEL GONZALEZ

HOUSTON—Valero Energy Corp. VLO -2.33% said Monday it will suspend operations at its Aruba refinery by the end of March because inadequate margins have resulted in financial losses.

The move comes as the refining industry grapples with major shifts in fuel demand and in energy production that have wiped out the profitability of such former refining hubs as the U.S. East Coast and the Caribbean. Caribbean refineries in particular lack access to the cheap natural gas, used as feedstock in fuel production, that helps make U.S. Gulf Coast refineries competitive, said Valero spokesman Bill Day. The island refineries are also missing the bonanza experienced by some refiners in the U.S. interior, which enjoy access to a glut of West Texas Intermediate crude that trades far below global crude prices.

Earlier Monday, Hess Corp. HES -1.82% said it hired Goldman Sachs Group Inc. GS -3.01% to help it explore the potential sale of its St. Lucia crude-oil and refined products storage and transshipment terminal in the Caribbean. The move follows its January shutdown of the Hovensa LLC refinery in St. Croix, U.S. Virgin Islands, after the refinery racked up $1.3 billion in losses over the past three years due to weak demand for refined petroleum products.

TugCE wrote:

We have enough oil in the country if only they were allowed to drill for it without all of the red tape that the EPA and other Government Agencies require.

Brassica wrote:


That is not true.

eightballsidepocket wrote:


Can't carry a firearm in your car unless it's unloaded and the cartridges are locked away.

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Can't build a pipe line from Canada to the gulf because of environmental factors........Heck when I was a working electrician the Prudhoe Bay oil line in Alaska was built in the 70's and it's a man made wonder of environmental protection. 50 years later, we somehow can't get a pipeline built across the country cause we might mess up the environment.

DirtyOil wrote:

This refinery is going to be shut because it can't make any money.


The margins in the business are little to none.

The margins are low due to oil stocks having to be imported from OPEC or Brent Sea oil. Because there is no infrastructure to deliver "cheap crude" from Canada or North Shore oil stocks, to eastern refineries.

Dubious.

USA imports very little (if any) "Brent Sea Oil" directly, if gasoline imports (indirect) is not counted.

Here are the top sources of imported oil:

Canada (25%)
Saudi Arabia (12%)
Nigeria (11%)
Venezuela (10%)
Mexico (9%)

The largest source of high prices are greedy Canadians who do not drop the price of crude oil sufficiently to make it a no brainer to ship crude from Canada via existing pipelines to Montreal, and then export it to USA via the Gulf.

Oil imports are a scant 7,616 thousand barrels a day as of this past week.

http://www.eia.gov/dnav/pet/pet_move_wkly_dc_NUS-Z00_mbblpd_w.htm


That refinery shut down because it had no cheap source of natural gas feedtock, without which it is impossible to run economically.





These days, it takes cheap Natural Gas, cheap crude (like from Canada --- which is flooding the market but have nowhere to go).


Cheap natural gas is due to "flooded" stocks, too much gas and not enough consumption, "cheap crude" is because no pipeline to the eastern shores of north america where the refineries are. (if the US would have allowed construction of the Keystone pipeline you would see a better price at the pumps) Canadian oil sells for $25-$30 less per barrel then WTI or Brent light. Canadian crude is not flooding the market! How do you flood the market when you can't get it to the market!?

Cheap natural gas is from the supply explosion caused by hydrofracting.

Have you heard of it?




Canadians need to lower the price of crude sufficiently to make it cheap enouugh to ship it to Montreal.



The Keystone pipeline got killed... and a reversal of another pipeline is not going to happen for quite a bit...

Keystone is not "killed"... oil is king the US has a large pool of untapped oil in Alaska (north shore) like Canadian crude just can't get it to the "market".

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If there is interest in a thread on how much or how little oil we have and why prices are where they are... start one.

DirtyOil wrote:




You started it.

Whats the matter? Did I touch a nerve? Did I catch you spewing your "cyber expertise" on a topic that you have no idea about? Did I trip you up... Did I find something your not an "expert" on?