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Flood of Russian Diesel Puts Pressure on European Refiners

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    Russia’s slowing economy is leading to a flood of Russian diesel flowing to Europe, which could force a new round of European refinery closures.
    Europe’s refineries–which turn crude oil into products such as gasoline and diesel–are already under pressure as the continent’s weak economy reduces demand for their output, dragging down prices and reducing profit.
    Such pressure has already resulted in at least 16 refineries in the region shutting crude capacity or indicating they plan to do so since 2008, and now diesel profits are being squeezed further by the influx of Russian fuel.
    Russia’s Baltic Sea exports of diesel to northwest Europe have risen to nearly 500,000 barrels a day from 300,000 at the same time last year, according to ESAI Energy LLC, an energy consultancy.
    The rise in exports comes as Russia’s economy weakens with a subsequent lower demand for the country’s commodities, and analysts expect the export trend to continue as Russian refiners look to sell their diesel abroad to make up for the waning domestic demand.

    by Jenny Gross   Dow Jones Newswires
    May 21, 2013

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