ECONOMY

HELPE has cut runs

LONDON – Greek refiner Hellenic Petroleum (HELPE) has trimmed refinery runs because of loss-making margins, a trading source said yesterday. HELPE this week cut runs by about a 10th at its simple refinery, which had been operating at normal levels previously, he said. The refiner earlier this week canceled a tender to sell several diesel cargoes because of the run cuts, which come a week after Swedish refiner Preem made a similar move at its 113,000-barrels-per-day (bpd) Gothenburg refinery. Several European refiners have begun to look at trimming operations following crude oil’s recent price surge, while gasoline values have slipped, leaving margins at simple Mediterranean refineries making losses of around $2.30 a barrel over the past week. Even profit margins at more complex refineries able to produce higher volumes of more valuable products, such as gasoline and diesel, were down at around $1 a barrel, from an average over the past year of more than $5 a barrel. With reduced refinery runs slowing crude oil consumption and Urals crude price differentials at their highest in more than three years, HELPE has no plans to issue any oil buy tenders until the end of August, preferring instead to dip into its own stocks. Urals crude price values have surged in the past two months on the back of limited prompt supplies. Russian oil exports fell 6.9 percent in June after oil export duties rose at the beginning of that month, prompting companies to divert flows to domestic refineries. Supplies of other heavy crude alternatives have also tightened on the back of OPEC production cuts. Athens-listed HELPE has three refineries, the 150,000-bpd Aspropyrgos refinery, the 100,000-bpd Elefsina refinery, and the 67,000-bpd Thessaloniki plant. The refinery run cuts, combined with partial refinery maintenance work in Spain and Italy as well as a seasonal pickup in motor fuel demand, have helped spur a recovery in Mediterranean diesel price premiums. A diesel cargo was offered at a $38-a-ton premium over front month ICE gas oil on Thursday, after premiums slipped below $30 a ton earlier this month for the first time since March.