LAT: Energy Profits Likely to Keep Rising

[DeepModem Mom]

Energy Profits Likely to Keep Rising
Industry executives and analysts expect refiners' gains to continue to be strong into next year.
By James F. Peltz, Times Staff Writer


Companies that refine oil into gasoline and other fuels, already benefiting from market disruptions caused by Hurricane Katrina, are likely to keep seeing robust profit gains through next year, industry executives and analysts said Wednesday.

Even before the storm, fuel prices and refiners' profit margins were rising to record levels because of low supplies coupled with strong demand for gasoline, diesel fuel, jet fuel and heating oil.

Katrina tightened that squeeze by knocking out much of the Gulf Coast's critical production and refining capacity. And with the rebuilding effort expected to take several months, refiners' earnings gains are expected to keep surging during 2006.

Valero Energy Corp., which became the nation's largest refiner a week ago with its $6.9-billion purchase of Premcor Inc., is "in the right business at the right time," Valero Chief Operating Officer William Klesse said at a Lehman Bros. energy conference in New York.

Although San Antonio-based Valero and others are toiling to restart refineries and production facilities damaged by the hurricane, "longer term we believe gasoline margins will continue to be strong," he said....


http://www.latimes.com/business/la-fi-energy8sep08,0,7105495.story?coll=la-home-business