Margins holding up so far, but pressure is rising

ONE OF the more surprising aspects of the recent rise in crude prices is that refining margins have remained relatively strong. Utilisation rates have dipped at times and there have been periods when margins were trimmed, but, generally, the 35% increase in crude prices this year and the near-doubling over the past 12 months, have been accommodated without the disruption that might have been forecast. According to the monthly Oil Market Report published by the International Energy Agency (IEA), a refinery in northwest Europe running North Sea Brent crude to a cracking yield earned a margin of $6.59 a barrel in April – a typical figure for that month, in which gasoline demand rises sharply. M