California will see almost one-fifth of its crude-processing capacity vanish in the next 12 months as two key refineries quit the business of turning oil into fuels.
Valero Energy Corp. and Phillips 66 plan to idle a combined 284,000 barrels of daily refining capacity by this time next year, moves that will squeeze the perennially tight motor-fuels market in the most-populous US state.
While imports of Asian gasoline and fuel from other parts of the West Coast may plug some of the expected supply gap, the California market already is so delicately balanced that isolated incidents can have an outsized impact. To wit: a February fire at a PBF Energy Inc. plant near San Francisco is seen limiting fuel output until at least the fourth quarter.
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