In a preview of what may be soon to come, Sunoco announced recently the indefinite closure of a large (145,000bpd) refinery in Eagle Point, New Jersey. Refining margins have remained poor for the last several weeks, hurting those who take crude oil and produce desirable products such as gasoline and diesel fuel.

The plant closure is expected to idle hundreds of workers that call the New Jersey plant home, according to Reuters. The announcement by Sunoco comes months after Valero cited similar reasons for shutting a large refinery in Aruba earlier this year.

Refining margins remain very thin, with the "crack spread", or profit margin for refining oil into gasoline and diesel, near $2 per barrel. Some refineries lose money each day processing crude oil depending on their location.

This may be the beginning of limited refinery consolidation, just two years after the industry set forth plans for a record amount of expansions. Many of those expansions were halted after the collapse in oil prices and the deep recession in the United States in 2008.

While this news may not immediately cause harm to consumers, if prices do climb back higher and gasoline demand rises, this closure, along with others, will cause prices to spike. A plant closure typically takes a few weeks to complete, and restarting a refinery can also take weeks, adding to the pain if margins quickly turn. Hopefully we won't see more capacity go offline any time soon!