There's a fuel sqeeze coming Europe ( Archived) (2)

By Ben Lefebvre Of DOW JONES NEWSWIRES HOUSTON (Dow Jones)--U.S. refiners could see new opportunities as Europe's largest independent refiner and wholesaler of petroleum products shuts down three of its five refineries, analysts said. Petroplus Holdings AG (PEPFY, PPHN.EB) announced the three closings last Friday as banks starting freezing more than $2 billion worth of the financially troubled Swiss company's credit lines. Petroplus has faced stubbornly high crude prices, stagnant demand and fierce competition from overseas refiners, which has led to net losses in every quarter except one since 2009. The refinery shutdowns in France, Belgium and Switzerland could help U.S. crude processors fill refining gaps and grab market share in Europe. That could increase the expanding U.S. exports of oil distillates, such as heating oil and diesel, to the Continent. Output from the combined 667,000 barrels a day of refining capacity at the shuttered refineries already has ceased, while the company's refineries in U.K. and Germany are running at half of their combined 330,000 barrel-a-day capacity, according to Petroplus Chief Executive Jean-Paul Vettier. Half of Petroplus's output is diesel according to a Bank of America energy newsletter. Europe has felt the effects of the closures. January diesel contracts on London's Intercontinental Exchange settled at $967.50 a metric ton Thursday, up 4.7% for the week, in part because of supply worries in the wake of Petroplus's shutdowns. U.S. fuel prices have yet to see any impact from the falloff in Petroplus's production. That could start to change if the closures linger through the winter and allow U.S. refiners to stake stronger claims in the European market, said Jason Schenker, president of consultancy Prestige Economics. "The longer Petroplus stays offline, the greater the probability for it to have a lasting impact" on U.S. refiners, Schenker said.
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