US: Goodbye to the good times

LAST YEAR, US refiners' profit margins reached record highs. This year, high oil prices have cut those margins significantly. Indeed, for a brief period in March, refineries found themselves selling finished products at a loss. The situation is particularly difficult for independents, which cannot count on upstream profits from crude sales to make up for falling downstream returns. As a result of growing gasoline consumption and limited refinery capacity to meet demand, refining industry margins rose in 2002 and reached record levels in the first months of 2007. US margins averaged $31.28 a barrel in the second quarter of 2007 – almost a 27% increase over margins in the first three months of