Oil refinery struggles could translate into higher prices

Ongoing troubles in the oil refining sector have raised the prospect of higher prices for refined petroleum products throughout the west, according to The Financial Times.

Profits at oil refineries have been pinched tighter and tighter by rising prices for crude oil over the past year, while demand has not remained strong enough to sustain higher prices for their products.

The most notable example of late has been French oil refinery operator Petroplus having several crucial lines of credit frozen as Europe continues to struggle through the lingering credit crisis.

However, the problem has proven more widespread. The Times notes that U.S. refinery capacity usage has fallen from 93 percent in 2001 to 86 percent at present, in part because of substantial investment in new refining plants as well as greater reliance on ethanol.

In the past three years, the International Energy Agency reports that nine oil refineries have closed, according to the Times, and more are expected.

Reuters reports that French oil giant will likely be forced to retain its oil refining plant in Lindsey, U.K., because of a lack of interest in the facility.

While the ongoing troubles among refiners could lead to lower crude oil prices, these savings will likely not result in lower prices for refined products.

PennEnergy's Research area contains reports on oil refineries around the world.

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