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However, the collapse in global oilprices has eroded a significant portion of the natural gas cost advantage. Additional issues that could hinder growth prospects include ongoing political tensions in Eastern Europe that could affect supply and the prices of gas exports from Russia to Western Europe.
We see refining margins weakening on worsening diesel fundamentals, particularly east of Suez, though gasoline should be supportive. On the other hand, it won’t be easy for Saudi Arabia—Chinese refiners are also producing more gasoline, for which demand is still strong. In fact, at $5.60 per barrel in first quarter of 2015).
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