For refining, more volatility is on its way

Margins will remain healthy in northern Europe and the US Gulf Coast until September. But a slide is coming

The collapsing oil price has been brutal for operators in the upstream, but refiners have been making hay. Brent’s slump was especially good for European product producers in 2015, when margins recovered strongly after years of weakness. Last August, European Brent crack spreads reached a three-year high of over $10 a barrel, their highest level since margins of more than $12.31/b were reached in September 2012. Behind last summer’s surge was the ever-cheapening price of Brent crude and a stellar showing from American drivers, who sent US gasoline demand sharply higher. This propelled European refiners – the main foreign supplier of gasoline to the US – to maximise production of the road fue