(IBTimes) - Instead of talking about refinery runs it looks
like all of a sudden there has been a run on refineries. In an
historic move Delta Airlines is now in the refinery business.
Bloomberg News reported that Delta Air Lines Inc. agreed to buy a
refinery from ConocoPhillips, breaking with U.S. carriers'
tradition of not owning their own fuel assets. After $30 million
in state government assistance, Delta is paying $150 million for
the complex in the Philadelphia suburb called Trainer, the
world's second-largest carrier said today in a statement.
Production at the refinery combined with multi-year agreements to
exchange other products for jet fuel will provide 80 percent of
Delta's needs in the U.S. ConocoPhillips had planned to shut the
Trainer operation unless it found a buyer by the end of May as
tighter profit margins squeeze East Coast refineries.
The Oil and Gas Journal reported that Energy Transfer Partners
signed a definitive merger agreement to acquire Sunoco Inc. in a
unit and cash transaction valued at $5.3 billion. Sunoco has been
withdrawing from the refining business and now operates mainly as
a logistics and retail business, owning the general partner
interest of Sunoco Logistics Partners LP. It has said it will
close its 330,000-b/d Philadelphia refinery in July if it doesn't
find a buyer but recently disclosed discussions about operating
the facility under a joint venture with Carlyle Group. Sunoco
Logistics owns 2,500 miles of products pipelines in the
Northeast, Midwest, and Southwest US and equity interests in four
products pipelines. It also owns 5,400 miles of crude oil
pipelines, mainly in Texas and Oklahoma. Its terminal facilities
include 42 million bbl of product and crude oil storage capacity
Sunoco Logistics terminals include the 22-million-bbl Nederland
Terminal on the Texas Gulf Coast and the 5-million-bbl Eagle
Point Terminal on the Delaware River in New Jersey. Sunoco Inc.
owns about 4,900 retail operations in 23 states. ETP owns 23,500
miles of natural gas gathering and transportation pipelines in 10
states, as well as treating and processing properties and three
storage facilities. It owns a 70% interest in Lone Star NGL,
which operates storage, fractionation, and transportation assets
in Texas, Louisiana, and Mississippi.
Natural gas rose as the Energy Information Agency reported
that production fell. Reuters News reported that that U.S.
natural gas production in February fell slightly from January's
record high according to government data on Monday, stirring
expectations that an over supplied gas market might finally
tighten and help pull up historically low prices. The EIA
reported that lower 48 "wet" or gross gas output in February
totaled 72.32 billion cubic feet per day, down 0.42 bcf per day,
or 0.6 percent, from downwardly revised January output of 72.74
bcf daily. The EIA's previous estimate for January was 72.85 bcf
While this seems to be giving the bulls new life, it is still
not enough of a cut to change the fact the production will
continue to outstrip demand all summer. More than likely, after
traders bask in this insignificant cut-back for the next couple
of days, the weekly inventory number should once again bring them
back down to earth.
Climate Change Alert! Climate Change Alert! The Wall Street
Journal reports that Wind Farms are having an impact on climate!
Darned environmental altering wind farms. The Journal says that
large wind farms slightly increase temperatures near the ground
as the turbines' rotor blades pull down warm air, according to
researchers who analyzed nine years of satellite readings around
four of the world's biggest wind farms. More proof that the
actions of man can impact climate! Let's call for a global
commission so they can find away to tax wind-farms to make up for
their impact on the environment! Not to mention all of the dead
Oil continues in a tight range with a slight upside bias.
Swing trades should be considered. The dollar has been the main
determining factor for oil as the balance between oversupply
versus geopolitical risk seems to be priced in. Natural gas is
looking strong but is perhaps destined to fail ... again.
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