Los Angeles Refiners Prepare for the Approach of Hurricane Hilary

Reuters, August 18, 2023

Los Angeles-area refineries, with a combined crude oil processing capacity of 1.1 million barrels per day (bpd), were preparing for the approach of Hurricane Hilary, the first such storm to menace southern California since 1939, the companies said.

The five refineries were operating as planned on Friday as a tropical storm warning was issued for the region.

Phillips 66 (PSX.N) said operations at its 139,000-bpd Los Angeles refinery were unaffected by the storm.

Refiners Chevron (CVX.N), Valero (VLO.N), PBF (PBF.N) and Marathon Petroleum (MPC.N) declined to discuss operations at their refineries.

Local and state regulators did not report any changes in operations at Los Angeles refineries on Friday and West Coast refined market traders said they did not know of any cut backs in production.

Spot market prices for August-delivery, California-blend gasoline rose 20 cents on Thursday to 60 cents a gallon over September New York Mercantile Exchange (NYMEX) gasoline futures as the likelihood of Hilary moving over California became more apparent, traders said.

With the forecast path of the storm moving further east of Los Angeles on Friday, August California gasoline traded down 14.5 cents a gallon at 45.5 cents a gallon over NYMEX September gasoline futures, traders said.

The U.S. National Hurricane Center said Hilary is forecast to be at tropical storm strength when it moves east of Los Angeles on Monday. But, the city and its suburbs remain in areas where the storm could go on Monday if its path changes.

Heavy rain, possible flash flooding and winds at 40 miles per hour (64 kph) or stronger are forecast for Los Angeles on Sunday and Monday.

The U.S. West Coast is dependent on the region's refineries and imports from Asia and the Middle East for motor fuel supplies. There are no pipelines connecting California with refining complexes along the U.S. Gulf Coast and in the Middle West.

(Reporting by Erwin Seba; Editing by Grant McCool)

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