* Refining and trading made 60pct of oil majors' profits inQ1
* Strong margins to fade by Q4 2015
* Golden age will not change need for refinery closures
By Ron Bousso and Libby George
LONDON, May 1 (Reuters) - The world's top oil companies canexpect only limited solace from refining for the rest of theyear, even as the often-troubled segment proved valuable in theface of sinking oil prices.
Overcapacity in the sector previously made it the bane ofintegrated oil majors such as BP, Royal Dutch Shell, Exxon Mobil, Chevron, Total and Eni.
But the situation was reversed by weak crude prices, so thatcombined profits for the oil majors from refining and tradingrepresented 60 percent of total earnings in the first quarter of2015, compared with 18 percent last year, according to Reuterscalculations.
In contrast, companies without refining divisions felt thebrunt of the oil price collapse, with Norway's Statoil for instance swinging to surprise net loss.
Refining and trading is now expected to cushion companies'results in the second quarter, albeit less so after oil pricesgained more than 20 percent in April.
"The refining boom is probably already running down inApril," Simon Henry, Shell's chief financial officer, said onThursday, adding that positive factors such as relatively highlevels of maintenance, reducing overcapacity, were beginning tosubside.
BP expected refining margins in the second quarter to besimilar to the first due to high levels of global refinerymaintenance.
Energy consultancy FGE said the U.S. driving season andMiddle Eastern distillate demand during the summer would prolongthe scenario, but by the fourth quarter refining would again bea drag. And any increase in crude prices would further weakenrefining margins.
FGE expects margins to fall to just $2 per barrel in Europeby the fourth quarter, from around $6 per barrel now, and toroughly halve in the United States to around $5 to $6 per barrelfrom now to the end of the year.
"That doesn't leave much to cover fixed (refining) costs,"FGE's Steve Sawyer said. "You won't see (strong downstream) formuch longer."
NO GAME CHANGER
Ultimately, companies such as France's Total andItaly's Eni are unlikely to change plans to scale downrefining in Europe as they face growing overseas competition andlimited regional demand.
Shell's Henry said he sees a "self correction" in marginscoming soon, while Sawyer said new production and a relativelyhigh level of stored products would weigh on the industry.
"You have something of a perfect storm for refineries in thefourth quarter," Sawyer said. "Refinery output in the MiddleEast is set to be 1 million barrels per day higher than lastyear. Where is all that product going to go?"
Abu Dhabi's newly expanded Ruwais refinery expects to befully up and running by June. India's biggest refiner IOC alsobegan last month operations at its new Paradip refinery.
Additionally, traders who used the drop in oil pricesearlier this year to store oil in order to sell it at higherprices in the future, a market structure known as contango, areexpected to offload some of those products.
BP said it will gradually sell throughout 2015 more than$1.25 billion of oil, the equivalent of around 23 millionbarrels, it had stored earlier this year.
"When we look back at 2015," Sawyer said, "the second halfof the year will be a lot different than the first half." (Editing by David Holmes)
