Eni To Shut Venice Refinery For 6 Mos Due Weak Margins-Trade

Italian oil giant Eni SpA (E) will shut its 80,000 barrel-a-day Porto Marghera refinery near Venice for six months, starting Nov. 1, under pressure from an absence of Libyan crude exports and weak profit margins, traders said Wednesday.

"This refiner used Libyan crude only, so [the] shortage of it plus negative refining margins pushed Eni to close it," a North Sea trader said. He said the impact on prices would be minimal because of the refinery's relatively low production level.

Eni did not immediately respond to calls for comment.

Other Mediterranean refineries are also cutting throughput, or runs, because their refining margins, of returns from refining crude into products such as gasoline, diesel and gasoil, are under pressure, a second trader said.

Refining margins have weakened in recent weeks as crude prices have increased due to supply disruptions in the North Sea and elswhere.

Although margins have recovered slightly in the last few days with the easing of Brent crude prices, refiners' profits are still "very low," said David Wech, head of research at JBC.

"You have a tight crude market and tight crude product market and that's a bad cocktail for the refining industry," Wech said.

A string of supply disruptions in the North Sea pushed prices for Forties crude, the main component of benchmark Brent, to a record high two weeks ago.