Oklahoma could be home to the first large-scale oil refinery built in the U.S. in nearly 50 years.
Privately held Southern Rock Energy Partners is planning a refinery capable of producing 250,000 barrels a day of oil products in Cushing, an oil hub where the U.S. price benchmark, West Texas Intermediate, is measured. The refinery will cost $5.6 billion, open in 2027, use solar and geothermal power, and also produce hydrogen, which can replace natural gas in parts of the refining process.
Southern Rock can succeed, says managing member Steven Ward, because “we’re a smaller, more nimble company.” The refinery will process only U.S.-produced oil; most large U.S. refineries were built for heavier imported crudes that are more complex to handle. The project still needs state and federal permits, and expects state and local incentives to help with financing.
The last major U.S. oil refinery was built in 1977 in Louisiana. Meanwhile, the industry has been shrinking. Six U.S. refineries with cumulative capacity of 750,000 barrels closed in 2020 and 2021. Lack of U.S. refining capacity was a reason that gasoline prices spiked more than oil in 2022.
Last year,
Chevron
CEO Mike Wirth said that no large-scale refinery would ever be built in the U.S. In an email, Tudor, Pickering, Holt analyst Matthew Blair also expressed skepticism. “It seems like every year someone announces a new refinery for the U.S. But they almost never get built, given the challenges on economics and permitting.”
Write to Avi Salzman at [email protected]
Last Week
Relief Rally
China saw signs of a continuing slowdown in growth, as manufacturing contracted again and stocks fell into a bear market. U.S. stocks were mixed before the House debt-ceiling vote, but rallied as the Senate took default off the table. On a short week, the
Dow Jones Industrial Average
rose 2%, to 33,762.76; the
S&P 500
index was up 1.8%, to 4282.37; and the
Nasdaq Composite
advanced 2%, to 13240.77.
Dodging Default
President Joe Biden and House Speaker Kevin McCarthy agreed on a plan to raise the debt ceiling for two years. The deal involved a number of compromises, mostly on spending, from both sides. Then came the difficult part: gathering enough votes to pass the bill and avoid default. On Wednesday night, the House passed the bill on a bipartisan basis, 314 to 117, sending it to the Senate, which approved it by a 63-to-36 vote on Thursday night. Next up: President Biden.
Jobs, Rates, and Retail
With default fading, attention turned toward rates—the Fed crowd was talking again—and the state of the economy. New jobs and hiring beat expectations, tempered by slowing wage growth and slightly higher jobless claims. Unemployment rose to 3.7%.
Dollar General
and
Macy’s
joined
Costco
in cutting sales forecasts.
Erdogan: Five More Years
Turkish President Erdogan won a runoff election, and another five years in power. After the vote, the Turkish lira fell to a near record low against the dollar, on fears of a continuation of low interest rates, despite inflation over 40%. Western leaders also renewed pressure on Erdogan to drop his opposition to Sweden joining NATO.
Drones of War
Russia said it downed eight drones targeting residential areas in Moscow. Ukraine denied “direct involvement” in the attack, which was followed by a drone attack on an oil facility at a Russian military base. Russia continued its assault on Kyiv.
The Corporate Front
Chip stocks
Nvidia,
Marvell Technology,
and
Advanced Micro Devices
continued to rally on artificial-intelligence hopes, despite a tweet from Ark Investment founder Cathie Wood that Nvidia, which briefly hit the trillion-dollar market cap on Tuesday, was “priced ahead of the curve.” Wood cut her Nvidia position ahead of the rally, but talked up software stocks, including Tesla, as the next big AI
bets…C3.ai
broke the AI spell with a disappointing sales
forecast…Kohl’s
stock took a hit after it joined
Anheuser-Busch InBev
and Target in facing a boycott over Pride Month merchandise.
Walmart
resisted the pressure…
Berkshire Hathaway
lifted its
Occidental Petroleum
stake to 25%.
Annals of Deal Making
Ten European insurers, including
AXA,
Allianz, Swiss Re, and Lloyd’s of London, left a U.N.-sponsored ESG insurance alliance, after 23 GOP state attorneys general warned they might be violating antitrust guidelines. AXA had chaired the group…Fidelity said Twitter is now worth a third of the $44 billion Elon Musk paid for it. Fidelity was a lender to the deal…
Amazon.com’s
$1.65 billion deal for iRobot faces a European merger review.
Write to Robert Teitelman at [email protected]
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