Shell says restart of Europe's largest refinery is at least two weeks away
Reuters
Published Aug 01, 2017 16:01
Shell says restart of Europe's largest refinery is at least two weeks away
By Libby George
LONDON (Reuters) - Royal Dutch Shell (L:RDSa) said on Tuesday the earliest restart expected for Europe's largest oil refinery is the second half of August.
Shell shut most units at the 404,000-barrels-per-day (bpd) Pernis refinery in the Netherlands following a power outage caused by a fire on the evening of July 29.
"We expect to restart our operations at the earliest in the second half of August," a spokesman said in an email. "We regret the impact this may cause for our customers, and we are doing everything we can to minimize impact."
Shell suspended loadings of oil products from the refinery after the fire, and reported a hydrogen fluoride leak on Monday evening.
"The damage in the power station must be repaired before the refinery can be rebooted step by step," Shell said in a statement.
The issue is holding down crude futures, which extended losses on Tuesday as the outage of a large Atlantic Basin oil consumer compounded worries about a global glut.
"It's rather a cascade of bearish news," Commerzbank (DE:CBKG) analyst Carsten Fritsch told the Reuters Global Oil Forum. "The news about the prolonged refinery outage was probably the straw that broke the camel's back."
Diesel cracks in Europe (LGOc1) on the Intercontinental Exchange rose more than 2 percent to $13.35 per barrel. Refinery margins in Europe remain nearly double their year-earlier level.
Traders expect their counterparts in Asia and the United States to send distillates to Europe to fill the gap, though on Tuesday just two new diesel cargoes were booked to sail from the U.S. Gulf to Europe.
Meanwhile, there are likely to be fewer cargoes of gasoline available for export from Europe to other markets, including the United States.
U.S. gasoline futures (RBc1) sharply pared losses on the news, as some traders had expected a quicker restart. The U.S. gasoline crack spread, a measure of margins, RBc1-CLc1 also trimmed losses and last traded 0.6 percent lower at $20.12 a barrel.
Overall U.S. refining margins
Shell said its Moerdijk petrochemicals refinery, which is integrated with Pernis, was still operational.
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