One swallow doesn’t make a summer

As the first quarter’s results begin to roll in, it is already clear that Europe’s refiners have enjoyed a strong start to this year. But how long will the good times last?

In northwest Europe, reference margins for Hungary’s Mol, Poland’s Lotos and the Czech Republic’s Unipetrol are all up on the year. The story is the same in the Mediterranean region for Spain’s Repsol, while Portugal’s Galp yesterday upped its benchmark margin forecast for 2017 by 50¢/bl to $3/bl, following a strong first quarter.  Total has also reported stronger first-quarter margins, as have BP and Finland’s Neste.

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A refiner for all seasons

The icy blast of the 2008 financial crisis, a high-cost base, fierce competition from new capacity in the Middle East and Asia, downward demand trends because of stagnant population growth and greater engine efficiency, perverse tax regimes, and the rolling thunder of environmental legislation. To survive as a refiner in Europe requires constant vigilance and frequent reinvention.

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