Refinery Capital and Maintenance Spending Projected to Rise in 2010, but Margins Will Remain Thin

BATON ROUGE, LOUISIANA--November 19, 2009--U.S. oil refiners will increase spending on capital and maintenance projects in 2010, but large stocks of refined product mean continued thin operating margins for refiners, at least for the first half of 2010. The U.S. already is an over-supplied market, and the supply-demand imbalance will be further aggravated with this year's addition of new refining capacity, which totals about 1.8 million barrels of oil per day. Although the future of many refinery expansion projects is uncertain, most projects involving environmental compliance and unit upgrades will almost certainly move forward. Spending on refinery turnarounds is expected to be significantly higher than in previous years.