Sector Snap: Refiners slide with crude, market

NEW YORK - Against the backdrop of union negotiations and the threat that its workers could strike this weekend, shares of refiners slid on Thursday along with the price of crude oil and the broader market, which reacted to negative housing, industry and job numbers.

Light, sweet crude for March delivery fell 80 cents, or 1.9 percent, to $41.34 on the New York Mercantile Exchange. Oil continues to trade about 70 percent below it's July peak of $147.27, as a worsening economy and growing unemployment have beaten down demand for oil.

Shares of Exxon Mobil Corp., the world's biggest oil refiner, shed $2.25, or 2.8 percent, to $77. Valero Energy Corp. fell 56 cents, or 2.2 percent, to $24.69.

All of these refiners, along with a list of about 60 other companies including Royal Dutch Shell, BP PLC and Tesoro Corp., could see up 24,000 of their their unionized oil workers strike as soon as this weekend if negotiations do not result in a new contract.

But with refiners actually trying to cut production in the face of waning demand, a strike may actually play in their favor, said Antoine Halff, an analyst with Newedge Group.

"A strike threat would be particularly ill-advised under current market conditions as refiners would presumably be better prepared to sit out a work stoppage than any time in recent memory, and striking workers might even be doing the industry a favor by bearing the labor cost of further tightening product fundmaentals," Halff said.

If workers go on strike, refineries that had planned to shut down part of their operation to cope with gas demand declines may stop running entirely, said Peter Beutel, an analyst with Cameron Hanover.

"This will only hasten the movement higher of gasoline and diesel prices," he said.

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