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This happens when margins get too low: cheaper to shut for repairs than to operate at a loss.

Saudi output should fall a bid due to lack of demand, but crude prices should hold at their levels.

Gasoline prices should increase vs crude prices (crack spreads widen).

Shell, BP to Shut Refineries for Repair, Cut Europe Fuel Supply

by Nidaa Bakhsh

Sept. 25 (Bloomberg) Royal Dutch Shell Plc, BP Plc and Total SA are leading oil companies that will shut at least 6 percent of Europe’s refining for repairs next month, reducing inventories already diminished by U.S. demand after Hurricane Ike.

The outages from Rotterdam to Italy will idle at least 952,000 barrels of crude oil distillation a day in October, double the September figure, according to data compiled by Bloomberg. The total includes plants owned by Shell and BP in the Netherlands, representing a combined 400,000 barrels a day.

Refinery profits in western Europe fell to their lowest level since at least 2004 this year as record prices cut fuel demand. Gasoline inventories fell 18 percent to 612,000 metric tons in the Amsterdam-Rotterdam-Antwerp region last week, according to Dutch consultant PJK International BV, because of rising exports to the U.S. after Hurricane Ike shut Gulf Coast refineries.


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