Europe's Refiners Under Pressure From Libya and US

摘要

Europe's hard-pressed refining sector faces a tough second quarter, with both profitability and runs likely to remain constrained. Throughputs might normally be expected to bounce back in April after the peak of spring maintenance outages in March. But this seems unlikely this year with analysts predicting run cuts as crude costs soar with the Libyan crisis and Europe's refiners face unfair competition from US refiners currently enjoying a subsidy from WTI's dislocation from international markets (JFI Apr.4,p1). Euroil stock data show that European refinery utilization dropped by almost five percentage points in March to 77.34%, compared with 82.04% in February and 82.67% in March 2010. This was largely due to planned maintenance, although there has also been talk in the market of refiners trimming runs rather than paying high prices for sweet crude following the loss of Libyan export barrels. And according to analysts JBC Energy, refiners will find it "difficult to bring their units back from maintenance. Utilization rates at 78% in April and May would be a partial success for the old continent's refiners, while rates above 80% are highly unlikely in our view."