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Explosion and Fire Hit BP Refinery

WHITING, Ind. -- Three people were injured and a processing unit was downed at BP's 420,000-barrels-per-day Whiting, Ind., oil refinery, the country's third-largest, after an explosion and fire last Friday, reported Reuters.

The blast downed a catalytic hydrotreater, which removes sulfur from crude oil and distillates before further processing into oil products, but the rest of the refinery was operating normally, the oil company said. BP has 300,000-bpd capacity of catalytic hydrotreating at the plant.

The plant is a big supplier to the Chicago cash oil products market, where traders said BP was seen buying in the market on Friday.

Whiting police said one of the injured suffered a minor shoulder wound after the large blast. "I live a mile from the refinery and I could feel my walls trembling," said detective sergeant Donald Greer.

The Whiting fire department told Reuters that BP's own squad fought the fire and that it had not been called out to fight the blaze.

The fire pushed NYMEX September oil futures to a record $45.93 per barrel on Friday. Worries about possible unrest in oil producer Venezuela during this past weekend's referendum on the rule of President Hugo Chavez, as well as strong Chinese demand and worries about sabotage in Iraq, also contributed to the rise.

The Whiting explosion and fire underlined the fragility of a refinery system that is struggling to meet national consumption growth rates of 3.5 percent. U.S. refinery bottlenecks are seen as a prime factor behind this year's price surge.

Rising energy prices are becoming a U.S. campaign issue, added a separate Bloomberg report. Democratic presidential candidate John Kerry said record high oil prices will cost 435,000 U.S. jobs by next year.

"When we have gas prices going through the roof, the Americans I've met don't think we've turned the corner," Kerry said in remarks prepared for delivery at a campaign stop in Springfield, Ore. "This is bad news for their wallets, and even worse news for our economy. America can do better."

In other oil news, Shell Oil Co. has agreed to postpone the Oct. 1 shutdown of its Bakersfield, Calif. Refinery for six months to allow more time to find a potential buyer, providing at least a temporary reprieve to consumers in one of the nation's tightest gasoline markets.
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