OPEC joins call for more refineries

Citing higher prices for oil products and reduced spare capacity in refineries, OPEC has called for big oil companies and developed nations to build more refineries.

OPEC’s call for new refineries echoes a call for an increase in refining capacity made last weekend by the finance ministers of the G8 nations.

No new refineries have been built in the US in the past 30 years and none are on the drawing board either there or in Europe.

In North America, refining capacity did increase by 0.7 percent last year, but that small increase was due to additions to existing facilities.

In the past three years, spare capacity in existing refineries has fallen to around 5 percent, one factor in the rise in the prices of oil products to near record highs. These price hikes have reduced consumer demand, which is not good for OPEC or the nations which use a great deal of oil.

Analysts believe that crude oil prices, $55.00 per barrel for US crude on Thursday morning, might reach $60 per barrel this summer.

A representative of the National Petrochemical and Refiners Association blames the lack of new refinery construction on a combination of restrictive environmental regulations and communities that don’t want refineries built in their neighborhoods.