Many aging refineries are due for scheduled maintenance and while prices have pulled back, many may use this time to go off line to do maintenance work. Meanwhile, European refineries may reduce output and that could further pressure the US distillate markets. Margins have been hit since Iraq halted oil exports and OPEC agreed to hold output steady, keeping crude futures prices high. Oil products have by contrast been relatively weak, with rising U.S. gasoline inventory easing fears of another summer of petrol shortages for the world's biggest energy consumer. Refiners may have more impact on prices in the end.
Crude inventories are meaningless if refiners don t manufacture enough of the end product.
The decision has far-reaching consequences for the oil industry and Midwestern farmers. The request came from Democratic Gov. Gray Davis of California. Bush, who lost the state in the presidential election, also has rejected Davis' request for federal price caps to ease California's power crisis. The EPA, after consultations with the White House, rejected Davis's plea, concluding the environmental benefits of the oxygenate rule were too important, said an administration official, speaking on condition of anonymity. How times have changed.