High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/45c10f40-324c-11e3-b3a7-00144feab7de.html#ixzz2hPb8mM6J US refiners are benefiting at the expense of their European peers as surging shale oil production plugs the gap from supply disruptions within the Opec oil cartel, according to the International Energy Agency. Citing US government data, the IEA said that in September, American refineries processed almost 1m more barrels a day than in the same month last year, as they took advantage of relatively cheap domestic supplies provided by the shale revolution. The high levels of activity came at a time when US refineries tend to undergo seasonal maintenance. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/45c10f40-324c-11e3-b3a7-00144feab7de.html#ixzz2hPbBxVmZ “The level of runs in the US is incredible. For turnround seasons these are levels we have never seen,� said Antoine Halff, head of oil market research at the IEA – the energy watchdog. The surge in US activity comes in stark contrast to European refiners, which have cut back on activity as they have had to pay more to source crude oil amid disruptions to supplies from Libya, Nigeria and more recently Iraq. In its monthly report, the IEA said crude oil production from the Opec cartel, which includes the large African and Middle Eastern producers, dipped below 30m barrels a day for the first time in almost two years in September. This was despite Saudi Arabia pumping record levels of crude oil at more than 10m b/d for a third consecutive month. The fall in the oil cartel’s output was offset by increased non-Opec production, which grew by 1.7m b/d in the third quarter compared to a year earlier, the steepest annual growth for any quarter in more than 10 years. Most of that additional non-Opec oil is from the US, encouraging global crude prices, which have been converging for most of the year, to diverge once again. This week the discount of US oil to Brent, the global benchmark, hit a four-month high of almost $9 per barrel. “A lot of geopolitical risk seems to be concentrated in north Africa and the Middle East, so that is having more of an impact on Brent prices and on European refineries, especially in the case of Libya,� Mr Halff said. European refineries have reduced runs to their lowest levels in decades in September and October, according to estimates from consultancies, as they encounter difficulties in securing crude and face competition from cheaper US exports of finished products, such as diesel and gasoline. Last week Hungarian refiner Mol said it would close its 55,000 b/d Mantova refinery in northern Italy in January 2014, the latest in a line of closures which has reduced European capacity by 1.7m b/d since 2008, according to the IEA. Pressure on European refiners is set to grow as Saudi Arabia ramps up activity at its Jubail refinery, which has capacity to process 400,000 b/d. The world’s largest crude oil exporter has traditionally been an importer of finished products, but as it meets more of its own needs from domestic refineries, it will free up imports from Asia to compete with European products.

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