* New refining capacity to pressure margins
* Global demand growth set to slow in 2016
By Ron Bousso and Kristen Hays
HOUSTON, Feb 24 (Reuters) - Oil refiners are set to enjoyanother year of robust profits as feedstock prices remain low,but new plants and slower global growth mean 2016 will not be aboom year.
The 70 percent drop in crude oil prices since mid-2014sparked a worldwide boom in demand last year, as drivers in theUnited States, China and India bought more cars and took moreroad trips.
Refineries operated at full throttle throughout 2015 andbooked the strongest profits in years as demand surged 1.8million barrels per day (bpd), or more than 2 percent from theprevious year.
This year, the International Energy Agency has said itexpects demand growth of 1.2 million bpd, down from last year'sunusually high rate, as the global economy slows and new carpurchases decline.
"This year, we see less favourable margins than in 2015,"Philippe Sauquet, head of refining at Total SA, saidon the sidelines of the CERAWeek conference in Houston, Texas.
State-of-the-art refineries set to start operating in theMiddle East and Asia will increase the supply of refinedproducts such as jet fuel, diesel and gasoline by around 1.3million bpd to 82.4 million bpd.
"We expect this year refining capacity surplus to go up. Butif demand is as strong as 1.2-1.5 million bpd, refining marginswill continue to be supported, (but) not as much as 2015," TufanErginbilgic, head of refining at British oil and gas company BP, said.
Horace Hobbs, chief economist for Phillips 66, thefourth-largest U.S. refiner, said in an interview that thecompany does not expect 2016 margins to match 2015 levels.
"But we do expect some real solid demand growth this year,primarily in gasoline," he said, citing cheap pump prices andgrowth in sales of sport-utility vehicles and pickup trucks.
He said the ability to export refined products drivesrefining margins more than low crude prices. When output exceedsdomestic demand, refiners can still run full tilt because theycan export to international markets that need their excess.
Phillips' U.S. Gulf Coast plants are focused on accessingthose markets, including Latin America, Africa and Europe.
"I think margins will be good, maybe not great," Hobbs said."We should have reasonably good growth in the U.S. and in ourprimary export markets."
Demand is expected to surge after April when the summerdriving season begins.
In recent weeks, U.S. refiners including Exxon Mobil Corp, Valero Energy Corp, PBF Energy INC,Philadelphia Energy Solutions and Monroe Energy, a unit of DeltaAirlines Inc, curbed output as stocks piled up duringwinter and hurt profits.
Refining and trading have rescued the world's top oilcompanies such as BP, Total, Exxon Mobil Corp. and RoyalDutch Shell during the current downcycle, somewhatoffsetting huge drops in revenue from oil production. (Editing by David Gregorio)
BP (BP.)
