Repsol Profit Tops Forecasts On Surprise Refining Strength
MADRID, July 24 (Reuters) – Spanish oil company Repsol , which is on the hunt for acquisitions, beat quarterly profit forecasts as a surprise surge in refining margins helped cushion production declines due to shutdowns in Libya.
Repsol, the first oil major to publish second-quarter results, on Thursday reported a 19.2 percent jump in its refining margin from a year ago as prices for heavier-grade crudes fell.
"U.S. refineries are using more light crude and this has helped the spread for heavier crudes used by Repsol. But overall the profit beat is the sum of a series of small surprises across different divisions," said Intermoney analyst Alvaro Navarro.
Repsol's refining margin, an industry measure of profitability, rose to $3.10 per barrel.
The rise contrasts with shrinking margins throughout Europe, where an economic slowdown has hit oil demand in the past few years, leaving European refineries operating at overcapacity.
Oil demand in Spain, reflected in the company's marketing division, was stable in the second quarter from a year ago, indicating the worst of the country's economic crisis may be over.
Spain's unemployment rate fell to its lowest level in two years in the second quarter, data showed on Thursday, lifted by strong job creation in the services sector and adding to hopes of a sustained economic turnaround.
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