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US refinery fires propel crude oil price past US$60

Back-to-back refinery fires in Texas and Louisiana sent crude futures back above US$60 a barrel yesterday as the unplanned outages fanned fears that production may not be able to meet demand in coming months.

An explosion and fire at British Petroleum PLC's Texas City plant on Thursday night came hours after a fire at Murphy Oil Corp's 120,000-barrel-a-day Louisiana diesel hydrotreater, which removes sulfur from fuel. Murphy said damage to the unit was minimal, but offered no estimate of when it might restart.

The fire at the Texas City refinery was brought under control yesterday morning, a BP spokesman told Dow Jones Newswires. An explosion at the same refinery in March killed 15 people.

"A number of disruptive news hit the market today, including the fire at a rig in India earlier this week and these added up and unnerved people," said Jonathan Copus, energy analyst at London-based Investec Securities.

Traders were also looking ahead to second-quarter GDP figures from the US later yesterday for indications on oil demand.

Light, sweet crude for September delivery rose US$0.40 to US$60.34 a barrel in electronic trading on the New York Mercantile Exchange. It closed up US$0.83 at US$59.94 in New York floor trading on news of the fire at Murphy's Meraux plant.

On London's International Petroleum Exchange, September Brent gained US$0.35 to US$59.11 a barrel with traders expecting the contract to push up to US$60 as buying momentum builds.

The BP refinery processes 433,000 barrels of crude oil a day and 3 percent of the US' gasoline. It was not immediately clear how much production was lost.
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