Five weeks into the current quarter, BP Plc is disclosing key indicators of refining margins that suggest refining profitability per barrel is slipping from their near term highs seen in the second quarter of 2010. The company's Web site shows their Refining Global Indicator Margin trending at US$4.42 per barrel in the third quarter to date through August 5, down almost 20% sequentially from the second quarter's value of $5.49/bbl.

As noted by the San Antonio Express News (SAEN) in an August 7 article, the refining sector saw a rare “bright spot” as company after company reported strong second quarter 2010 results after a number of sequential quarterly losses. But a research report by a team of independent refining analysts at Deutsche Bank (DB) note that typical cyclicality in the independent refining industry implies that “for refining earnings, the best quarter by far is Q2, next best Q3, third best Q1, and Q4 tends to be worst. In fact, Q4 tends to be horrible.”

The U.S. Department of Energy's Energy Information Administration (EIA) published its monthly Short Term Energy Outlook on August 10. The report contained petroleum demand and storage data as well as forward looking crude and motor gasoline price estimates based on forward projections made by the agency.

When crude prices escalate faster than refined product prices, refining margins suffer. And that is what the July Oil Market Report by the International Energy Agency (IEA) shows. The report was released on August 11 and notes that “product prices failed to capture increases seen in crude markets.” This led to lower refining margins “across all regions in July.”

A US$50.6 million fine was issued against BP Plc. for safety violations at its Texas City refinery, and the company must invest at least $500 million on safety improvements at the refinery, where 15 workers died in a 2005 explosion, according to the Occupational Safety and Health Administration (OSHA).

The U.S. Environmental Protection Agency (EPA) on August 12 announced that it is proposing two rules to ensure that businesses planning to build new, large facilities or make major expansions to existing ones will be able to obtain Clean Air Act permits that address their greenhouse gas (GHG) emissions. In spring 2010, EPA finalized the GHG Tailoring Rule, which specifies that beginning in 2011, projects that will increase GHG emissions substantially will require an air permit. These rules will help ensure that these sources will be able to get those permits regardless of where they are located, according to EPA.

The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) announced a public roundtable taking place August 20, 2010, to discuss rulemaking and implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This will impact energy industry participants who participate in hedges or swaps, either through a clearinghouse or even bilateral negotiated swaps. And as we learned August 18, even participants in the agricultural industry will want to take notice since the CFTC announced its rules and position limits will soon apply to agricultural as well as energy commodity derivates.

In a release emailed August 13, the U.S. Environmental Protection Agency (EPA) announced it will hold three public hearings on its Proposed Transport Rule, which aims at regulating cross-border pollution among the District of Columbia and 31 U.S. states east of the Rocky Mountains.

The three U.S. cities of Chicago, Philadelphia and Atlanta, will host the hearings on August 19, August 23 and August 31, respectively.

Hyundai officials announced August 4 that they aim to achieve at least 50 miles per gallon (mpg) corporate average fuel economy (CAFE) by 2025 as part of a strategy to maintain the title of best automaker fuel-efficiency in the U.S. market.

US$2.6 billion in debt has been placed for the Cairo Refinery, and we provide an update on the Mthombo Refinery in South Africa, and things accelerate in Nigeria as ONGC Mittal refinery goes on to feasibility study stage while another by NNPC is talked about in the press.

BPCL issues its “Dream Plan” to double refining capacity by 2015.

News on construction at Ruwais Base Oils Refinery

Hyperion Refinery Gets Support From Across the State Line, and a California refinery is set to restart operations in Bakersfield