Commodities Casino Keeps Rolling
HOUSTON (Dow Jones)–Sunoco Inc. (SUN) swung to a third-quarter loss on a host of charges and continued weak demand for oil-based fuels and chemicals.
Those difficulties are expected to continue amid the economy’s weakness, said Chief Executive Lynn Elsenhans.
“As we consider the outlook for the rest of the year and into 2010, we do not anticipate significant improvement in the refining market,” Elsenhans said during a call Thursday with analysts.
Last month, Sunoco became the first oil company to say it will close a U.S. refinery, a ploy aimed at getting that segment to break even this year. All of the units at Eagle Point plant in Westville, N.J., ceased production this week, Elsenhans said.
So demand for crude is down so much that we’re actually closing refineries in this country, but the price of crude is up 150% since the beginning of the year. Makes sense, right?
Thanks to my friends in the commodities business for pointing this out. We continue to see pricing in the commodities markets that is disconnected from reality, which makes it all the more distressing that the bill currently being shepherded though Barney Frank’s Financial Services Committee (and which still has to be reconciled with an AG committee bill) seemingly doesn’t do a whole lot to correct these problems. More on this later, right now I have to go remove the railroad spike I just drove into my eye after reading the story that Alex Rodriguez apparently has a portrait of himself in the form of a centaur hanging in his bedroom.