* Oil from Nigeria, Libya and Kazakhstan gives a boost
* Margins average 50 percent higher than Q1 2016 - http://reut.rs/2lPOGtN
* Fuel oil crack strengthens http://reut.rs/2kNZxAf
By Libby George and Ahmad Ghaddar
LONDON, Feb 17 (Reuters) - A global deal to cut oilproduction has had the unintended consequence of aiding Europe'solder refineries by bolstering supplies of light crude whilecurbing shipments of the heavier grades favoured by moreadvanced plants in other continents.
These European units, long thought doomed by competitionfrom state-of-the-art refineries in the Middle East, Asia andthe United States, are in the right place at the right time -enjoying good demand and oil availability that is, for them,growing.
"European refiners are well positioned versus the OPECcuts," said David Wech, managing director of consultancy JBCEnergy. "The supply that is taken out of the market hitsprimarily the Asian market."
A deal between the Organization of the Petroleum ExportingCountries and non-member producers to cut output by 1.8 millionbarrels per day (bpd) has held oil prices roughly 20 percentabove the low just before they sealed the pact late last year.
Pricier crude often saps refiners' earnings. But refinerymargins, a measure of profit, stood near $7 per barrel for asimple plant processing Brent crude in Rotterdam, Reuters datashowed, 50 percent above the first-quarter average last year.
Part of the benefit is that most of the oil cut by OPEC washeavy crude preferred by the more complex refineries, which byand large are not in Europe.
European refineries are in general older and less complexthan the newest units, such as the giant Jamnagar plant inIndia. Simpler refineries often prefer easier-to-process lightoil, which is in abundance in Europe's backyard as OPECproducers Libya and Nigeria were exempt from the cuts. Crudefrom Kazakhstan's Kashagan field is also pumping away.
Meanwhile, while Russia has cut overall production, exportsof its Urals crude are pushing higher in the first half of thisyear.
As a result, the likes of Italy's Saras, Greece'sHellenic Petroleum and majors that run refineries inEurope such as BP, Royal Dutch Shell and ENI have access to a range of crude cargoes.
"In general, the more locally grown crudes ... were notincluded as part of the (supply-cut) agreement," said SteveSawyer, head of refining at FGE Energy.
The forecast for margins is so good that some refineries,such as Turkey's Tupras, have postponed maintenanceshutdowns that were scheduled for the spring, industry sourcestold Reuters.
SWING PRODUCERS
Still-strong demand for fuels, and refinery woes elsewhere,are also helping.
The International Energy Agency raised its 2017 forecast forgrowth in global oil demand to 1.4 million bpd. But at the sametime, refineries in Latin American oil producers Venezuela,Mexico and Brazil have grappled with fires, unplanned shutdownsand lower production - leaving little surplus refining capacity.
"Europe's refineries are the world's marginal refineries.They are the swing capacity," Sawyer said.
Lower Latin American production has also slashed theavailability of sulphur-rich fuel oil, making it moreprofitable.
Although fuel oil usually costs refineries money to sell,simple plants that lack desulphurisation capacity - such asthose in the Mediterranean - have no choice but to crank outwhat is normally seen as a byproduct.
All these factors are likely to keep refining margins"robust and healthy" for at least the first half of the year,Gunvor's chief economist David Fyfe said at a recent conferencein Antwerp.
"It's a confluence of factors. It's crude availabilities andit's strong (fuel oil)," Fyfe said.
(Reporting by Libby George; Editing by Dale Hudson)