BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil

European refineries looking at run cuts, switching crude oil slates

Natural Gas | Oil

So what happened at MPGC 2019?

Natural Gas | Oil

Platts Scenario Planning Service

Natural Gas | Oil | Refined Products | Shipping | Marine Fuels | Tankers

Bunker and Residual Fuel Conference, 16th Annual

Oil | Crude Oil | Gasoline

Trump Libya shift likely driven by oil, gasoline price fears: analysts

European refineries looking at run cuts, switching crude oil slates

London — Refineries in Northwest Europe have started to cut runs or change crude slates due to the ongoing weak margin environment in the region, sources said.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"Refinery runs are being cut, but most likely not to the extent as everyone makes it seem. Perhaps 15%-20% will go," a crude trader said, adding that less complex refineries might see larger cuts.

At least one major oil company has seen cuts to its refinery slate, sources said, with others in Northwest Europe considering it as cracks remained poor, particularly for light end products.

"Refineries will trim gasoline products [as they] have poor yields," one gasoline trader said.

Other sources said some refineries have maximized their middle distillate yields, as that part of the market has not seen the same fall in margins as the light and heavier ends.

"The only thing you can do is reduce FCC runs because they make the majority of gasoline. Hydrocrackers are majority distillate...and then the feed that goes into the FCC that you are not running, i,e. VGO, you put into the bunker fuel pool," a second gasoline trader said.

"That will happen for sure in 2020 post IMO, but it is getting so bad on gasoline that some might start early."

In recent financial reports on Q4 2018 trading, oil companies referred to deteriorating refining margins, especially for gasoline and naphtha, with many expecting lower margins in 2019.

However, its not just the light end of the barrel which has seen cuts.

While some refineries have recently been maximizing sour crudes due to improved fuel oil cracks, these seemed to have tailed off for others.

"We are long [sour crude] and are trying to offload length as our refineries cut sour requirements," said one crude trader, adding he has tried to re-optimize short-haul crudes like Russia's medium sour Urals.

Other crude traders talked of switching to run more medium sweet crudes to take advantage of the increased US arbitrage flows into the region.

"I think some refineries are switching qualities of crude, to WTI Midland for sure," said a second crude trader.

-- Staff, newsdesk@spglobal.com

-- Edited by Dan Lalor, daniel.lalor@spglobal.com