NEW YORK -- As many 24,000 refinery workers could walk off the job from the Gulf Coast to Montana with a labor contract expiring at midnight Saturday, potentially disrupting the production of gasoline, diesel and chemicals.

The employees include union workers at Holly Corp.'s Woods Cross refinery and Tesoro Corp.'s Salt Lake City plant, who are asking for changes to a new contract before the existing agreement expires.

The local union members want safety standards and procedures to be strengthened, according to Steve Pettegrew, president of the United Steelworkers Union Local 12-578, which represents about 100 of the 140 Holly refinery workers.

The refinery spent $174 million in capital improvements the past three years that increased safety and efficiency, said refinery manager Lynn Keddington.

About 210 workers in the two refineries are covered by the existing contract, said Julie Holzer, a spokeswoman for the United Steelworkers Union District 12.

A nationwide strike by unionized oil workers could affect about 60 producers including Exxon Mobil, Valero, Royal Dutch Shell, BP PLC, and Chevron, according to the United Steelworkers union, which represents them.

The impasse comes at a time when demand for gasoline, chemicals and other products made by refineries has evaporated, however, which could cost the union leverage.

Between November 2007 and October, Americans drove 100 billion fewer miles, the largest continuous decline in driving the nation has ever experienced. Refineries began shutting down for maintenance early this year as the market continues to tighten.

"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," said Antoine Halff, an analyst with Newedge Group.

Retail gasoline prices edged up again overnight with refiners pulling back production, but at a national average price of about $1.84, a gallon of gasoline still costs nearly 40 percent less than at did at this time last year, according to according to auto club AAA, Wright Express and the Oil and Price Information Service.

Still, gasoline futures jumped 4 percent Thursday on the New York Mercantile Exchange as the deadline approached.

Bobby Hollis, chairman of the negotiating committee for the USW for Valero said negotiations are "moving at a snail's pace."

Hollis said he doubts an agreement will be reached by the deadline.

"If it goes as fast as it's been going, (a strike) is imminent," Hollis said.

Negotiations could be extended, but if there is no measurable progress before Saturday, workers will head to the picket lines, said Lynne Baker, a spokeswoman for the United Steelworkers, which represents more than 30,000 oil workers nationwide.

Bill Day, a spokesman for Valero Energy Corp. said he was "cautiously optimistic" about the negotiations.

"We're hopeful we can reach an agreement without a work stoppage," Day said.

Prem Nair, a spokeswoman for Exxon Mobil, said the company is still actively negotiating and has made arrangements to keep the plant operational until a collective bargaining agreement is reached.

"We do not anticipate any supply impact and we expect to be able to meet our contractual commitments," Nair said.

Exxon has four refineries that could be affected by the strike, in Beaumont, Texas; New Orleans, Billings, Mont.; and Torrance, Calif.

Contributing: Bloomberg News

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