Spared Refineries

123jump.com Staff
25 Sep, 2005
New York City

Refineries in Texas have been spared the feared heavy damage but it may take weeks or even a month to bring oil production, refining, and pipeline infrastructure back to normal. Eight ports in the region transporting more than 55% of farm exports may take couple weeks to restart. Lack of electric and man power may slow recovery.

Hurricane Rita Update

Crude oil in light trading in New York and in electronic trading in London fell as first impressions after Hurricane Rita suggest that little damage was done to the Gulf of Mexico’s oil infrastructure. Crude prices in New York fell $1.40 per barrel to $62.80, heating oil fell six cents to $1.88 per gallon and gasoline fell ten cents to $1.98 per gallon. In trading in London crude oil fell $2.59 per barrel to $62.01.

The sixteen refineries in the Texas state processing close to 23% of crude oil appear to have been spared from the heavy damage feared by many. These refineries can process four million barrels of oil a day. In addition four other refineries with 0.7 million barrels a day processing capacity or close to 5% of total U.S. capacity are closed after three weeks of Hurricane Katrina.

Oil companies have evacuated 76% of manned off-shore platform prior to Hurricane Rita and shut down the entire oil production of 1.5 million barrels per day and 80% of natural gas production. According Coast Guard’s preliminary assessment very little damage appears to have been done to the off-shore platforms. However, Hurricane Katrina damaged several small platforms and still many large platforms are out of commission.

According to ExxonMobil, the largest refinery processing 557,000 barrels per day, located in Baytown, Texas operated by the company is expected to restart after minor repairs in few days. Colonial Pipeline transporting gasoline, oil, and heating oil is still operating at less than fifty percent capacity according the officials at Mineral Management Services, a government agency.

Valero Energy’s Port Arthur refinery has sustained some damages and may take more than two weeks to reopen. Other refineries operated in Houston area by Exxon Mobil, Motiva, BP, and Valero have been spared from the hurricane damage.

Whether the extent of damage from Hurricane Rita is severe or not, oil infrastructure will takes weeks if not months to recover from the double blow of back-back hurricanes. Oil and gasoline prices are likely to be volatile in the coming weeks.


Earnings to Watch for the Week

Stride Rite Corp. ((SRR)), footwear producer, is expected to post on Tuesday a quarterly profit of 17 cents per share, up a penny a share vs. the same time last year on a revenue of $147.87 million. The company stock has lost 7% over the last three months.

Lennar Corp. ((LEN)), homebuilding and financial services company, is expected to report on Tuesday a quarterly net profit of $1.98 per share, up from $ 1.36 for the comparable period last year on a revenue of $3.46 billion. The company share has declined 11% over the last three months.

Manugistics Group Inc. ((MANU)), management software products provider, is expected to post next Tuesday a quarterly net loss of 1 cents a share, up vs. a net loss of 7 cents a share for the comparable period a year ago on a revenue of $45.49 million. The company stock has gained 12% over the last three months.

SYNNEX Corp. ((SNX)), information technology products company, is expected to post on Tuesday a quarterly net profit of 32 cents a share, down vs. a net profit of 38 cents a share in the same time last year on a revenue of $1.39 billion. The company stock has declined 8 % over the last three months.

McCormick & Co. Inc. ((MKC)), food industry manufacturer, is expected to report on Wednesday a quarterly profit of 34 cents per share, up a penny a share vs. the comparable period last year on a revenue of $628.13 million. The company stock has lost 6% over the last three months.

Paychex Inc. ((PAYX)), computerized payroll provider, is forecasted to report on Wednesday a quarterly net profit of 28 cents per share, up vs. a net profit of 23 cents per share for the same time a year ago on a revenue of $389.39 million. The company stock has gained 11% over the last three months.

Merix Corp. ((MERX)), printed circuit boards manufacturer, is expected to post on Wednesday a quarterly net loss of 6 cents a share, up a penny a share vs. the comparable period last year on a revenue of $51.41 million. The company stock has lost 14% over the last three months.

Emmis Communications Corp. ((EMMS)), radio and television broadcasting company, is expected to report on Thursday a quarterly net profit of 21 cents per share, down vs. a net profit of 23 cents per share for the comparable period last year on a revenue of $169.10 million. The company stock has gained 20% over the last three months.

American Greetings Corp.((AM)), everyday and seasonal greeting cards producer, is expected to post a quarterly loss of 3 cents per share, down vs. a profit of 9 cents per share for the comparable period last year on revenue of $398.01 million. The company stock has declined 5% over the last three months.

Family Dollar Stores Inc.((FDO)), retailer, is expected to post on Thursday a quarterly net profit of 17 cents a share, down vs. a net profit of 25 cents a share for the comparable period last year on a revenue of $1.44 billion. The company stock has lost 33% over the last three months.