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* Around 676,000 bpd offline in Q2-IIR Energy * Significant drop from 1.13 million bpd in Q1 * Turnarounds centered in Midwest, with 408,000 bpd offline By Sabina Zawadzki NEW YORK, March 4 (Reuters) - The amount of U.S. oilrefinery capacity in maintenance should decline by almost 50percent in the second quarter compared with the first threemonths of this year, according to data from consultancy IIREnergy, boosting output of diesel and gasoline after an intensework schedule so far in 2013. IIR Energy sees an average of 676,000 barrels per day (bpd)of refining capacity being lost to maintenance work in thesecond quarter, above the five-year average for this time ofyear but a significant reduction from the 1.13 million barrelsit estimates was down in the first quarter. Midwest maintenance will take 408,000 bpd out of capacity,IIR Energy said, more than doubling a previous estimate reportedby Reuters on Jan. 18 for the second quarter largely becausework at BP's 405,000 bpd Whiting, Indiana, refinery hasbeen extended into the summer. The Whiting refinery is undergoing a $4 billion upgrade thatwill substantially increase its ability to process Canadianheavy crude. The plant's largest crude distillation unit hasbeen shut down since November as part of the project. "Planned turnaround should go down sharply," said MikeWittner, Head of Commodities Research, Americas, at SocieteGenerale. "Starting in April, month-on-month declines look to mepretty sharp and steady. This is extremely seasonal and fits thepattern," he said. Refinery maintenance in the first quarter will peak around2.2 million barrels per day in March, IIR Energy said. Refineries with access to crude in the Midwest have enjoyedgreatly improved margins in recent years with the boon of cheapdomestic oil from shale formations such as the Bakken in NorthDakota. To reap the most profits, they have kept plants running aslong as possible without interruptions for repairs, but thisyear they cannot avoid it. The first quarter average maintenancelevel of 1.13 million bpd is far higher than the 780,000 bpdthat is the norm over the last five years, according to IIREnergy. IIR Energy specializes in supply-side research into energyassets and plants and is a division of Industrial Info Resources(IIR) which conducts research into project and plant spending.Most refineries do not disclose their maintenance schedule. CRACKS UNDER PRESSURE The growth in new crude supplies has outpaced the U.S. oilsector's ability to build the infrastructure needed to move theoil to coastal refining centers. Inventories at the Cushing,Oklahoma, delivery point for U.S. oil futures have swelled torecord highs this year, lowering the value of the crude relativeto international prices. U.S. crude oil prices are now around $20 cheaper thaninternational benchmark Brent crude, overturning a decades-oldtrend of West Texas Intermediate trading at a premium to Brent. High levels of maintenance at refineries naturally weighfurther on crude prices by reducing demand. "The Whiting refinery, where maintenance has been delayed alittle bit, will definitely keep more capacity off line in PaddII than was originally expected," said Chris Barber, Oil MarketAnalyst with Energy Security Analysis Inc (ESAI). "All things being equal, with a part of that refinery down,this can be more bearish on crude as you get closer to May, whengas demand starts to pick up," he said. But other analysts noted that a more significant negativeimpact on U.S. crude from the BP project will come once allunits are fully functioning, because that is when the refinerywill switch the majority of its feed stock - 350,000 barrels outof a capacity of 405,000 barrels - to Canadian crude. The significantly lower expected maintenance levels in thesecond quarter, as compared to the first, should be bearish forgasoline and diesel prices, although there are several otherfactors at play, analysts said. "In an environment where products stocks have been built upand we would see refinery runs at high rates, and given thatmaintenance isn't as large as expected, I wouldn't really seehuge upward momentum for product cracks in the second quarter,"said Miswin Mahesh, analyst at Barclays Capital in London. Societe Generale's Wittner said gasoline and dieseldifferentials to their respective futures contracts should beunder downward pressure in the second quarter due to the lowermaintenance level. But he also noted maintenance was not always so significanta factor in product prices, especially at a time when refineryrun levels are not maxed out and in the three months of the yearthat precede the typical boom in demand during the summer. U.S. refinery runs have varied at between 84 and 89 percent,according to weekly data from the U.S. Energy InformationAdministration. When run levels are below maximum, plants canramp up production to compensate for others that are offline. IIR Data on Planned CDU Maintenance - 2013 In thousands of barrels January estimates Latest estimates 5-year average 1Q 2Q 1Q 2Q 1Q 2Q US 1,132 357 1,134 676 780 501 P1 122 8 122 8 116 87 P2 313 176 304 408 106 129 P3 611 29 631 115 444 157 P4 31 52 15 52 12 20 P5 55 92 62 92 101 109