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Refinery margins to benefit from low product, high crude oil stocks levels

Brussels (Platts)--22 Sep 2017 751 am EDT/1151 GMT


Refinery margins in the US and Europe will remain supported by increasing crude and decreasing product stocks levels, according to data by PJK International.

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"Th outlook is quite positive," Patrick Kulsen, managing director of PJK International told Platts annual refining conference in Brussels Friday.

"We expect refinery margins to remain strong for the medium term," Kulsen added.

Crude stocks have been growing as US production remains strong in a move similar to the end of 2014 when crude oil was sold at discounts "to stimulate higher utilization rates," said Kulsen.

2015 saw refineries ramp up their utilization to capture the healthy margins, which in turn brought up higher stocks levels in 2016 which pushed both refinery runs and margins down.

But this year "product stocks have been lowered significantly," Kulsen said, while product demand is up "with European economic growth and international trade gaining momentum."

Distillate demand has increased both in the US and Europe, Kulsen said.

--Elza Turner, elza.turner@spglobal.com
--Edited by Maurice Geller, maurice.geller@spglobal.com


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