U.S. refiners' golden era fading as LatAm export boom stalls
By Luc Cohen
NEW YORK, July 17 (Reuters) - Big U.S. oil refiners along the Gulf of Mexico, which have led an almost charmed life for the past five years, may have to brace themselves for leaner times in the months ahead.
A boom in domestic shale production yielded a gusher of high-quality oil available at discounted prices thanks to an longstanding ban on U.S. crude exports.
Refiners made billions by turning half of that extra supply into products such as gasoline and diesel that could be freely exported to countries including Brazil and Colombia.
More recently, while drillers reel from the collapse in crude prices, refiners such as Valero Energy Corp and Phillips 66 are still riding high on healthy margins, savoring an OPEC-induced surplus of crude while low pump prices revive domestic demand.
But that business may start losing some of its luster in the coming months, according to a Reuters analysis of refining capacity and export data.
Key customers in Latin America, where about half of U.S. fuel exports go, are poised to import less as they finish refinery projects while an expected contraction in regional economic activity saps demand.
Some 300,000 barrels per day of new capacity will come online in Latin America later this year, according to Reuters calculations. That is equivalent to the combined imports by Brazil and Ecuador, two of the biggest buyers of U.S. fuel, in the first four months of the year.
To be sure, struggling economies, such as Venezuela and Brazil, will find it hard to expand or upgrade refineries and will need to keep relying on imports. Continuación...