Crude prices hitting Saudi refiner

Aug. 22, 2011 at 9:00 AM

RIYADH, Saudi Arabia, Aug. 22 (UPI) -- Declines in the price for crude oil are putting pressure on refiners in Saudi Arabia, a market report from a joint venture with Saudi Aramco suggests.

With the Libyan regime of Moammar Gadhafi on the verge of collapse Monday, most major indexes indicated declines in the price of crude oil.

Petro Rabigh, a joint venture between state-owned Saudi Arabian Oil Co. and Japan's Sumitomo Chemical, in a note to clients, was seen as "highly geared" to crude prices and therefore "susceptible for margin pressure," Emirati newspaper The National reports.

The company boasted an annual output of around 18 million tons of refined products and some 2.4 million tons of petrochemicals. Its complex includes one refinery that can produce 400,000 barrels of oil per day.

Nevertheless, the newspaper notes that, because part of the complex was shut for maintenance this year, it missed out on the bull market in energy.

"By the time the company's plant became fully operational, oil prices declined by 7.6 percent since the start of July due to global macroeconomic concerns," a research note quoted by the newspaper read.

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