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The Future of Mid-Continent Refiners

By Joel South and Taylor Muckerman - Apr 23, 2013 at 4:00PM

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Is the incredible run for U.S. refiners over?

What does the future hold for mid-continent refiners? In this video, Motley Fool energy analyst Joel South describes the issues facing refiners today. First, the EPA recently announced possible limits on sulfur content in gasoline, which would increase gasoline production costs. Also ethanol Renewable Identification Numbers are becoming more expensive, further pressuring profit margins. Next, the WTI-Brent crude spread has now declined to about $12. This lowers mid-continent refiners' competitive advantage over coastal refineries. However, this spread was not uncommon in the past and may not be that big of a problem, especially as oil drops below $90 per barrel. Lastly, the export market remains strong: Exports to Central and South America, Europe, and even Asia can give refiners a boost in revenue.

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