Sunoco shuts down a refinery

[bwilson4web]

2nd UPDATE:Sunoco First To Close Major US Refinery In Downturn - WSJ.com

Sunoco Inc. (SUN) on Tuesday became the first major oil refiner to announce the shutdown of a big U.S. refinery during the sector's most recent downturn - and it isn't expected to be the last.

Sunoco, the second-largest U.S. independent oil refiner by volume after Valero Energy Corp. (VLO), also cut its dividend in half. Both actions, taken because "the operating environment continues to be very poor," are expected to save the big oil refiner a total of $320 million a year.

The move to mothball the Eagle Point refinery in Westville, N.J. comes months after speculation that some East Coast refineries would have to shut down, as the region's facilities suffer from poor refining margins and strong competition from Europe. The U.S. refining sector as a whole has been struggling as fuel demand wanes while the federal government tightens regulation of the industry. Last month, Valero drastically cut back operations in its Delaware refinery, and extended the shutdown of its Aruba refinery for an undetermined period.

. . .

"Drill Baby, Drill!" call of a Dodo's right wing:


Bob Wilson

[LRKingII]

Actually if you look he's waving his left wing.

[Rybold]

I wish this was the beginning of the future (aka: everyone driving PHEVs and demand for oil actually diminishing), but I'm sure this is only a result of the recession's affect upon the refining business.

[rfruth]

oh boy now we can buy even more from OPEC (ugh)

[Shawn Clark]

Queue the folks who've been screeching for years that we needed to build more new world scale refineries so they could have $1 gas. Oh...well...maybe not.

Refining margins can remain tight for decades if there is oversupply on the gasoline side of things. Hopefully, that is where we are headed, but for different reasons than the last few decades (actual demand destruction this time around.)