Oil Refining: Severe Drop In Demand Signals A Prolonged Downturn Jun 09
- ID: 1857386
- June 2009
- Standard & Poors
Standard & Poor's Ratings Services expects the refining sector to be highly exposed to a prolonged downturn following the International Energy Agency's (IEA) forecast of an almost unprecedented drop in oil product demand in 2009. We expect the current steep fall in middle distillate crack spreads to impact European and Asian refiners most in 2009, as they tend to have a high share of middle distillates (40%-60%) compared to approximately 30% for a typical U.S. refinery. The recent recovery of gasoline cracks is positive for U.S. refiners, but the sustainability of gasoline demand strength remains highly uncertain. The profitability of complex refineries is also strongly affected, as heavy crude oil differentials have contracted steeply with lower demand and oil prices....
Companies mentioned in this report are:
- Sunoco Inc.
- Valero Energy Corp.
- GS Caltex Corp.
- Reliance Industries Ltd.
- Indian Oil Corp. Ltd.
- MOL Hungarian Oil and Gas PLC
- Petroplus Holdings AG
- IRPC Public Co. Ltd.
- SK Innovation Co. Ltd.
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Research Type: Commentary
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