Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Western Refining Rises on Permian Oil Discount: Houston Mover

Jan. 10 (Bloomberg) -- Western Refining Inc., the owner of refineries near the Permian Basin in West Texas and New Mexico, rose the most in two months with Permian crude at a record discount to U.S. benchmark prices.

Western rose $1.19, or 4.4 percent, to $28.21 on the New York Stock Exchange. Volume was 3.24 million shares, the most since Aug. 13. The shares, which reached $28.65 in intraday trading, have more than doubled in the past year.

A surge in production in the Permian basin, the largest oil field in the U.S., along with refinery maintenance in the region, has created a glut of crude in the region.

The discount of light, sweet oil in Midland, Texas, to U.S. benchmark crude in Cushing, Oklahoma, was an average of $12.51 a barrel in December, the largest monthly gap since Bloomberg began recording prices in May 2008. Midland is the pricing point for Permian crude. In 2011, the discount there averaged 52 cents a barrel.

Western has two refineries, a 128,000-barrel-a-day plant in El Paso, Texas, that runs 74 percent light, sweet crude from the Permian, and a 25,000-barrel-a-day plant in Gallup, New Mexico, that runs 90 percent light, sweet Permian oil, according to a December company presentation.

The plants are on the outskirts of the Permian Basin, where production has grown to 1.3 million barrels a day in December from an average of 880,000 in 2009, according to a U.S. Energy Information Administration analysis of production data. Crude production has exceeded pipeline capacity out of the region, prompting Occidental Petroleum Corp., Magellan Midstream Partners LP and Sunoco Logistics Partners LP to build new pipelines and reverse existing ones to transport oil to the Texas Gulf Coast.

Western plans to shut part of its El Paso refinery for several weeks of maintenance in February, Gary Hanson, a Tempe, Arizona-based spokesman, said by e-mail.

To contact the reporter on this story: Dan Murtaugh in Houston at dmurtaugh@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.