How are you folks making out with the closings of Hovensa? I know you guys will bounce back just like you always do. I have noticed a slight drop on long term rentals, any other inconveniences that have been noticeable?

not yet, but it will soon happen. most gas stations do not know where they will get their fuel from. hope they find one soon. some talk of businesses closing.

I don't think that we'll see many of the effects until 4/20. There are currently 217 Condo's for Sale on STX, there were about 197 on 01/20.
There are currently 349 houses for sale, there are currently 17 Condo Rentals.

I would guess that Consumer Spending is probably starting to become more conservative- but many of the mainline employees are receiving severance, separation, and some retention bonuses.

From what I know, some 1600-1700 employees (contractor and hovensa combined) will be separarted on 4/20. Additional employees will go on 7/20. Still more around 12/20. By 12/20, they will be down to the "the 100".

I think that the some of the effects will start to be felt around 6/20, when many of the housing benefits stop.

Employees, Contractor Employees have long shored up our long term rental market- I am afraid this will evaporate...I hope that something comes about to reverse this- that maybe I am incorrect...

I think that this Buyer's Market will get better for the Buyer between June and December. After that? Who knows

Mind you, I take NO delight in any of this....One could easily assume that there will be a like "splatter" effect throughout our economy- that's why it's so VERY important to utilize as much on island support that we ca.

I also am cautious, though not apprehensive about the our economy. As a property owner who has been here for more than a decade, caution would dictate- knee jerk reactions or theory would be somewhat counterproductive. Wait, look, listen- I think that the Buyer's Market will prevail for probably about a year or more....

Interesting enough though, I have heard rumor from some of my island connections that the closure may not be longer than a year or so, but then again, informed sources tell me this is unrealistic. What to do? Alot of us have put our lives and souls into this community- and will not abandon her in her hour of need....

Casual talk with friends reveals a lot of people buying rental properties over the next 6 - 12 months, doing some flips and holds - understanding they may hold the property empty for a while, but the interest is there. Also friends from the states who have been frequent visitors and have wanted to buy here, but have held off due to price, now are considering "the buy." The Buyer's Market is starting to show to me...

Friend predicts $7/gallon for gas with WAPA going to $1+/kwh. Thoughts? He's actually the most optimistic person I know here.

Quite possibly. For us that means about another $50/month for gas. We already consolidate trips for fuel-efficiency and consider fuel-efficient alternatives.

I've seen predicitions of $5 - $6 on the Continental US as well. The rising cost of gasoline is more than a USVI issue.

Yes, I would agree that it will be a Buyer's Market for a while, probably with some resultant flattening of the market prices...

I do not think that an electrical rate of $1 is realistic. Right now it's .44 on the residential side- the LEAC is .37. There's roughly a 15% discount. To transship and store will probably be about $7 a barrel. So, $144 a barrel for fuel, plus $7 for tranport and storage- $151 a barrel- the LEAC will go up by 17% max- .43.. So about .51 a KWH.

But with WAPA's usual spins and total disregard for the islands financial solvency- I have predicted on two radio shows- .55 to .60....

Gasoline- let's see- this is an easy equation as long as the market keeps doing what it has been with cyclic up and downs- this is elative to uninterrupted commerce. I will say that the current futures price keeps going between $3.20 and $3.60 a gallon. Let's work it backward from the FOB point- we'll use the high end, so it present a worst case scenario... From US Gulf-PR-HOVENSA-RACK-RETAILER

Refinery- 3.60, plus shipping (5/bbl) = 3.71, Storage Cost (.05 a gallon per month- 30 days- based on 150,000 bbls) (2/bbl) = 3.75, shipping to STX- (5/bbl) = 3.86, storage on STX- (2/bbl) = 3.90, Tax @ .07 gal plus new tax .07= .14 = 4.04, (Rack- .05/gal) = 4.05, Transport to Gas Station- .11 gal= 4.16, GRT= (supply and end point- that two times) .17 plus .18= 4.51- typical profit mark up on STX- .35 to .40= $4.91 a gallon.....

If we ship direct to STX, and not stop in PR- then .15 less- to around 4.75 a gallon- this will occur within the first week of July-

I don't have all the answers but I did stay at a Holiday Inn express last night!

Gasoline in southern California last Monday = $4.72 per gallon. $150 per barrel by Memorial Day. Betting on $10 per gallon by year end. Some really big stuff happening on global scale.



Edited 1 time(s). Last edit at 03/17/2012 10:45PM by blu4u.

Remember that the Gasoline Season for Summer starts in March, Contracts are 90 days forward, the prices as delivered now on contracts are actually for June...

Quote
blu4u
Gasoline in southern California last Monday = $4.72 per gallon. $150 per barrel by Memorial Day. Betting on $10 per gallon by year end. Some really big stuff happening on global scale.

blu4u, are you literally betting? If not, you can do so at intrade.com, where you can bet for or against this statement: "Average national price of gasoline to hit $4.50 per gallon or more before midnight ET 31 Dec 2012." You can also bet on similar statements for $5.00 or $5.50 per gallon. Right now, they're giving 50/50 odds on $4.50 a gallon by year's end.
[www.intrade.com]

Just paid 4.67 here in Alaska and the tourist season doesnt start till may when price goes up.

If I look hard, I can find it today in So Cal for $4.29/gallon.

Actually, the economy on STX has been very vibrant lately in my opinion. It seems that the island has begun to wake up from a 40 year slumber now that we dont have Hovensa to line our pockets anymore. The amount of commerce going seems to have increased a lot over the past few months.

Regarding the re-opening of the refinery...I believe it will re-open under a new but familiar brand once they flush out all the exisiting labor contracts and get the EPA to bend on the concent decree. All will be well again soon.

I hope your correct on a reopening but i am in refining and most of the time when they shutdown they will not reopen.Loss of experience is hard to replace.Hovensa has had its share of problems.Your right we need to move on just in case. Still hopeing to relocate in the next ten months.

vicanuck, I think the uptick is coming from the Danish charters. I can see an increase from last year for Jan, Feb, and Mar, but what happens when they leave?

vicanuck-

As far as I can recall- there must be a specified amount of time between cancellation of the labor contracts and a new owner starting work. I believe that it will be some form of retooling to NG- whether LNG or CNG- CNG being the wave of the future for ease of infrastucture and conversion. I have thought this from day one- closing to cancel all of the labor contracts and the discounting of fuel to WAPA...BUT- some (very informed individuals) state that this is definitely not the case- as the remainder of the repairs to the plant are in the magnitude of 1 billion or so.

Actually- I think that the conversion to a storage facility is just to keep a positive cash flow until the place can be sold....

I don't think it will ever be sold. On the mainland if you sell a piece of property you must first remove any contamination before the EPA will allow a sale.
If they keep it this does not have to be done.
A friend who is has close ties says it will not reopen, at least in the form it once was. In fact the Chinese are looking to buy some of the equiptment such as the coker.

Coker is sold, FCC, sold,
St. Lucia Terminal is for sale( wall street journal yesterday).
Valero Aruba (shut down yesterday).

FCC?? please explain, thanks

FCC Fluid Catalytic Cracker? I think... It's a unit at the refinery. Not the Federal Communications Commission.

There's an extensive article on page 3 of today's Daily News. If you don't buy a hard copy you can access it online later in the day at [www.virginislandsdailynews.com]

Me thinks the old refinery will eventually end up being a Super Fund site in 10 or 20 years...big corporations always leave their messes behind for the government to clean up. Just look at what Alumina left behind.

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JulieKay
Casual talk with friends reveals a lot of people buying rental properties over the next 6 - 12 months, doing some flips and holds - understanding they may hold the property empty for a while, but the interest is there. Also friends from the states who have been frequent visitors and have wanted to buy here, but have held off due to price, now are considering "the buy." The Buyer's Market is starting to show to me...

Several years ago I investigated buying one of the Mill Harbor condos and asked the broker why so many units were up for sale. She informed me about WAPA's proximity and how it occassionally fluoridated the sea with waste water leakage causing frequent beach closures. I am still routinely checking the condo listings and have turned my signts to Colony Cove as I prefer the grounds and unit layouts. Obviously with respect to WAPA's effluent spills Colony Cove and the other surrounding condos suffer the same circumstance as Mill Harbor (which would explain the number of units on the market).

In spite of the significant inventory, WAPA spills and Hovensa closing I have not seen any price reductions for any of these units during the last several years. I recognize that the prices for these units have been and still remain relatively low in comparison to some of the other condos on the island and understand the reasons for this disparity but I question the validity of it being a "Buyers Market" when prices have remained constant for months and years. Do you think price reductions are still forthcoming or are these sellers just not motivated enough?