Senators of the 32nd Legislature of the US Virgin Islands have approved a proposed $1.4-billion operating agreement between the government and ArcLight Capital Partners LLC, Boston, to restart the 500,000-b/d refinery at Limetree Bay, on the island of St. Croix (OGJ Online, July 10, 2018; Jan. 18, 2012). Ratified following a special session that began on July 25 in Charlotte Amalie, St. Thomas, the refinery agreement will lead to more than 1,300 local jobs during construction and as many as 700 permanent jobs upon restarting the facility, operations of which are scheduled for commissioning by yearend 2019 with an initial crude processing capacity of about 200,000 b/d, the USVI government said. “This is a good day for the people of the Virgin Islands as we have signified to the outside world that following two Category 5 hurricanes, we are truly open for business and private sector investment in our community,” USVI Gov. Kenneth Mapp said. While the refinery-operating portion of the agreement has been approved, Gov. Mapp noted that much work lies ahead, as senators did not act on the proposal in its entirety. Mapp expressed concern regarding removal of provisions that would directly shore up solvency of the Government Employees Retirement System (GERS), as well as senators’ failure to consider other portions of the original proposal related to the local economy and the future of GERS.

The front-month futures price for Brent crude oil settled at $73.45/bbl on Aug. 2, a decrease of $3.85 from July 2. The front-month futures price for West Texas Intermediate crude oil for delivery at Cushing, Okla., decreased $4.98/bbl during the same period, settling at $68.96/bbl on Aug. 2. Crude oil production from most members of the Organization of Petroleum Exporting Countries, Russia, and other oil-exporting countries were estimated to be higher in July compared with the average for this year’s first half. In addition, a faster-than-expected return of Libyan crude oil production following last month’s unplanned supply outage could have put downward pressure on oil prices. In its latest Short-Term Energy Outlook (STEO), the US Energy Information Administration forecasts that global petroleum inventories will decrease by an average of 100,000 b/d during the final 5 months of 2018 and then increase by an average of 300,000 b/d in 2019. EIA forecasts Brent crude oil prices to average $73/bbl in this year’s second half and to decline to an average of $71/bbl in 2019. “Higher production from OPEC and Russia compared with the first half of this year probably put downward pressure on crude oil prices in recent weeks, and we continue to expect Brent crude oil spot prices to fall towards $70/bbl by the end of 2018, as the market appears to be fairly balanced in the coming months,” said Linda Capuano, administrator of the US Energy Information Administration.