Oil Refiners Get Back to Reality as New Plants Erode Big Profits
- Big additions to processing capacity heap pressure on margins
- Oil majors broadly reported weaker earnings from refining
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A golden period of profits for oil processors is fading as a new generation of mega refineries comes online and China’s powerhouse economy falters.
Earnings from turning crude oil into petroleum products have softened this year, driving refineries in some parts of the world to cut production. Lackluster demand growth, largely reflecting China’s economic torpor, is a big part of the story but there’s also a structural element — surging capacity.