OIL producers may not like it that prices for the black stuff remain well below their recent peaks. For refiners it is a welcome respite from a long spell of gloom. In Europe, margins for turning oil into fuel are at "windfall levels" according to UBS, a bank. What refiners pay for oil has fallen even as petrol and diesel stay pricey. They should enjoy it while they can. Refining has long been a miserable business. In the 1970s oil companies thought that the world's thirst for fuel to power big cars would rise forever and built the refineries to match that prediction. But oil demand in the rich world has peaked and is falling, leaving the industry with massive overcapacity. At the same time competition from the Middle East, China and India is intensifying. Their big, new refineries outperform older ones in Europe and America, despite much investment in upgrading over recent years. Refined fuel can be shunted around the world as readily as crude - and trade in it has increased steadily. The capacity glut is causing casualties on both sides of the Atlantic. Petroplus, a Swiss refiner, collapsed in January. At the end of June Shell said it and its partners would buy Coryton, a former Petroplus plant east of London, downgrade it to a storage facility and lay off most of the workers. Across the pond, Atlantic Sunoco Philadelphia, the biggest refinery in north-eastern America, may soon turn off the lights. Refineries in Pennsylvania and the Virgin Islands, which also fed the region, closed this year. Like their European counterparts, their fate was sealed by their reliance on relatively expensive "light and sweet" crude, low in sulphur and viscosity, as a feedstock. Their demise has helped European refineries that can process cheaper, heavier grades of oil. But even for these, the relief will be short-lived. They are configured to turn out petrol, both for home markets and to export to America during its summer peak in demand. However, demand for petrol is falling on both sides of the Atlantic: motorists are driving less, buying more fuel-efficient cars and, in Europe, switching to diesel-engined vehicles. Improvements being made to pipelines will allow refineries along the Gulf of Mexico to pump their surplus petrol north, undercutting European imports. Europe's refineries cannot easily switch to producing more diesel. That, at least, will give American ones more scope to export their surplus diesel. Yet this will not compensate for falling petrol demand. The respite that cheaper crude has given the refiners is unlikely to last, and more losses and closures are likely.