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WHITING, Ind. -- A fire has cost the nation's fourth-largest oil refinery 10 percent of its production, but seasonal conditions may blunt the effects felt by consumers, reported the Associated Press.
The fire Friday struck one of four units at BP plc's Whiting Refinery that remove sulfur and nitrogen from oil that is used to make gasoline.
"Combined gasoline and distillate production at the refinery is now at approximately 90 percent of levels before the fire," BP spokeswoman Margaret Laney said from the company's offices in Warrenville, Ill. The refinery will operate at reduced capacity for several days while BP assesses the damage, she said.
The refinery on the shores of Lake Michigan a couple of miles east of Chicago can process up to 420,000 barrels of crude oil per day, or more than a quarter of BP's total U.S. production of 1.5 million barrels.
The production cutback and the tightening of the spot market helped drive up gasoline prices in the Chicago area and across the Midwest. The average self-serve price for all gasoline Monday morning in Chicago was $1.95 per gallon, up just over 2 cents per gallon from the price a week earlier, the Energy Information Administration reported.
Gas prices are rising despite factors that would hold them down, said Nicole Niemi of AAA Chicago. The start of the school year cuts into consumer demand for gasoline, and refiners are ending their production of cleaner-burning summer blends of gasoline. "This time of year prices typically don't go up even if crude (oil) is high," Niemi said.
In other news, oil prices slipped Monday after the president of Venezuela survived a recall referendum, though fears of potential supply interruptions in other parts of the world kept futures above $46 per barrel.
The vote in Venezuela, the world's fifth-largest oil exporter, had been one of many factors driving prices higher in recent weeks and so traders said Monday's decline could be short-lived.
The concern in Venezuela was that if the opposition had won there would have been a major overhaul of the state-run oil company, Petroleos de Venezuela S.A., and production would have suffered. But President Hugo Chavez had 58 percent of the vote after 94 percent of the votes had been counted.