Neste Oil Oyj, Finland’s only refiner, dropped the most in four weeks as Pohjola Bank Oyj said a slow European economy will hurt delivery volumes, with both renewable and traditional fuel margins becoming tighter.
Neste Oil fell as much as 3 percent, the most since July 3. Shares in the Espoo, Finland-based company declined 2.8 percent to 10.83 euros by the close in Helsinki. Trading volume exceeded the three-month daily average by about a third.
“We’ve lowered our second-half and 2014 forecasts to correspond with a more cautious outlook on European traffic fuel demand,” Henri Parkkinen, an analyst at Pohjola, said in a note today. He lowered his 12-month price estimate to 12.50 euros from 14 euros, keeping his recommendation at accumulate.
BP Plc said today it expects lower global refining margins during the third quarter as a result of capacity additions and refineries returning to production after outages.
Palm oil gained the most in almost seven months today as its recent decline attracted buyers. Neste Oil, which operates the world’s largest palm oil plant in Singapore, enjoys greater profits when palm oil is cheap compared with rapeseed oil.
“Vegetable oil price differences have narrowed at the start of the third quarter,” Parkkinen said. “We also prepare for a lower-than-estimated second-half spread between Brent crude oil and Russian Urals crude oil. The refining margin estimates are based on an assumption of low hedging levels.”