-The United Steelworkers union is gearing up to negotiate a “substantial” increase in wages with oil refiners, Bloomberg reports. USW, which bargained for a pay raise with Royal Dutch Shell two years ago, has set up a reimbursement fund for workers in the event of a strike. Bloomberg notes that a USW strike could shut down as much as 63% of U.S. fuel production. The union is seeking higher pay at a time in which refiners’ margins have increased amid lower oil prices and abundant domestic production.
-ExxonMobil and Chevron proved refining operations can buoy the performance of an integrated oil company when oil prices fall. Via Reuters, both companies reported higher-than-expected profits in the third quarter despite declining oil and gas production.
-A report from Moody’s, however, reveals the limited extent to which the U.S. shale bonanza and the oil price plunge can boost refiners’ profits. A bevy of new refinery expansion projects in the Middle East are expected to take away some market share from U.S. refiners. In addition, analysts expect only a slight uptick in global demand for petroleum and other liquids next year due to slowing demand growth in China and flat demand in Brazil and India. Companies with refineries located near the shale plays will be in the most favorable position as the market shifts.
-Meanwhile, a report from the Energy Information Administration showed Brent crude is a more important factor in determining U.S. gasoline prices than West Texas Intermediate. Thus, the impact of overturning the U.S. ban on crude oil exports on domestic gasoline prices would depend on how it affects global oil prices. Several reports have suggested removing the ban would push down global oil prices.
-Federal regulators allowed Sunoco Logistics to restore its Mid-Valley Pipeline to 80% of maximum operating pressure after an Oct. 13 oil leak in Caddo Parish, La. Via the Shreveport Times, Sunoco revised upward the amount of oil lost in the leak from 4,000 barrels to 4,500 barrels. The oil spilled onto acres of private land and into a bayou, but did not reach nearby Caddo Lake.
