Refiners Still Face Weak Marginsadmin
Although analysts said the EIA report of a 6.9 million-barrel decline in refined products last week was positive for refiners, many think refiners are far from out of the woods, as high crude prices and weaker demand for gasoline and diesel are likely to persist.
“We expect refiners to continue limiting production of gasoline in the coming week due to the weak margins,” said Soleil-Back Bay Research analyst Jacques H. Rousseau. “Refining stocks have declined significantly over the past few weeks, and appear to be pricing in a worst-case, no-demand-growth scenario, in our view.”
“We expect refining margins to resume their downward trend by early May,” said Lehman Brothers analyst Paul Cheng. “We also think that heating oil and diesel margin will trend lower from here.”