Booming fuel exports bring profits back to refining
HOUSTON -- Strong exports of gasoline, diesel and other fuels are transforming the economics of the refining industry, at least for the time being. Last year, oil and gas major ConocoPhillips Co. rid itself of its refining operations, spinning off its entire downstream business segment to form the new Phillips 66 company. When that decision was made, the reasoning behind it was sound -- oil and gas exploration and production were booming, but refineries were struggling with managing tight profit margins in the face of flat-lining U.S. demand for refined products. Back then, refining was seen as a tough business model -- refineries were squeezed between rising prices for their feedstock crude oil, a fact they couldn't control, and trying to pull a profit by selling finished products into a U.S. market that had all it needed, while actually cutting back on consumption. But the tables are turning lately, thanks almost entirely to booming exports.