By OGJ editors
HOUSTON, Oct. 26 -- Prudential Equity Group LLC, New York, raised its 2004 average US refining margin forecast to $8.85/bbl from $8.75/bbl to account for a stronger than expected third quarter.
Hurricane Ivan, by disrupting Gulf Coast refinery operations, lifted margins late in the quarter, said analyst Andrew Rosenfeld.
The US refining margin averaged $8.85/bbl in the third quarter, up 14% from the same quarter last year for companies Prudential follows.
Rosenfeld expects margins to decline as the industry heads into a seasonally weaker fourth quarter and as product inventories rebuild after falling after the hurricane.
He expects margins to carry a "risk premium" reflecting uncertainties about crude supply.
Prudential's 2005 US refining margin forecast of $6.85/bbl is under review in view of record margins recorded so far this year, low gasoline inventories, and concern over US and European distillate supply.
