By Libby George
LONDON, July 10 (Reuters) - A brief period of highprofitability for the world's oil refineries is likely to cometo an end as quickly as it began, the International EnergyAgency (IEA) said on Friday.
Weak crude oil and relatively high prices for gasoline,diesel and petrochemical feedstock have pushed up refiningprofits sharply over the last six months, helping oil companiescope with much lower profits from upstream production.
In the first quarter of this year, combined profits for thelikes of BP, Royal Dutch Shell, Exxon Mobil, Total and Eni from refining andtrading represented 60 percent of total earnings, compared with18 percent last year, according to Reuters calculations.
Crude oil prices collapsed from $115 a barrel in June 2014to a low near $45 in January. They have since recovered someground but are still close to half their peak last year.
By 1230 GMT on Friday, benchmark Brent crude oil wastrading around $59 a barrel.
But the IEA, which advises the world's biggest economies onenergy policy, says this mini golden era will soon end.
New refineries coming on stream this year and next, alongwith upgraded units at existing refineries, are set to reversethose gains.
"In 2015-2016, net capacity additions will be more thanneeded, which will cause the global utilization rate to decline,and casts a doubt on the continuation of current unusually highrefining margins," the IEA said in its monthly report.
The bulk of the new capacity is coming in the United States,where refineries are adding pieces of equipment to enable themto process more oil from the shale boom, and also from China.
In the Middle East, ADNOC's Ruwais refinery inAbu Dhabi is set to join two 400,000 barrels per day (bpd) megaunits that officially launched in Saudi Arabia in 2014.
The IEA estimates that global refining capacity will rise by1.1 million bpd per year in 2015 and 2016, bringing worldwidecapacity to just over 97 million bpd - a 2 percent increase.
While some closures are already planned in Europe and Asia,the agency no longer thinks these will be enough to balance thenew additions.
"On a cumulative basis, refinery additions remain belowdemand growth," it said. But it noted that some of this demandwill be met by biofuels and natural gas.
"With ever-increasing measures to curb greenhouse gassesemissions and increase efficiency, we forecast OECD (oilproducts) demand to resume its downward trend from 2017onwards," the IEA report said. (Reporting By Libby George; Editing by Christopher Johnson)
