US oil refiners to keep running at breakneck speeds in fourth quarter
Overall, refiners are forecasting production will remain close to third-quarter levels, analyst says
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U.S. oil refiners this quarter will run their plants at breakneck rates, near or above 90% of capacity, as tight fuel supplies spur high profits and operating rates, according to company forecasts and analysts surveyed by Reuters.
The refining industry has minted huge profits this year on buoyant demand for gasoline, diesel and jet fuel. Fourth-quarter outlooks should keep earnings high even as gasoline consumption slips during the winter.
The Valero St. Charles oil refinery is seen during a tour of the refinery in Norco, Louisiana August 15, 2008. REUTERS/Shannon Stapleton (UNITED STATES) (Reuters Photos)
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Largest U.S. refiner Marathon Petroleum Corp aims to operate its system at 93% of combined oil processing capacity, a cooler pace as it completes maintenance work at some plants. It ran at 98% of capacity last quarter.
Second-largest Valero Energy plans to run at between 91% and 95% of capacity this quarter, while LyondellBasell Industries targets an above 90% rate, and Phillips 66 projects a low-to-mid 90% run rate, according to figures released by the companies.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MPC | MARATHON PETROLEUM CORP. | 157.41 | +1.26 | +0.81% |
| VLO | VALERO ENERGY CORP. | 140.14 | +1.06 | +0.76% |
| LYB | LYONDELLBASELL INDUSTRIES NV | 82.05 | +0.05 | +0.06% |
| PSX | PHILLIPS 66 | 136.43 | +2.45 | +1.83% |
| PBF | PBF ENERGY INC. | 32.70 | +1.21 | +3.84% |
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Sixth-largest U.S. refiner PBF Energy has not disclosed its plan. On Oct. 25, finance chief Erik Young said the company had the cash and borrowing power to "operate our refining system at elevated utilization rates."
A view of the ExxonMobil Baton Rouge Refinery in Baton Rouge, Louisiana, U.S., May 15, 2021. Picture taken May 15, 2021. REUTERS/Kathleen Flynn (Reuters Photos)
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PBF restarted units idled during the pandemic at its Paulsboro, N.J., plant to produce more diesel and jet fuel, with the company's refineries running at a record-high 980,000 barrels per day last quarter, Young said.
Overall, refiners are forecasting production will remain close to third quarter levels, which averaged 92.75%, said Matthew Blair, refining analyst at researcher Tudor Pickering & Holt. If refiners overall hold their production flat "that would be really strong," Blair said.
The plans reflect robust demand for diesel and jet fuel with U.S. inventories below the five-year average, said John Paisie, president of energy consultancy and researcher Stratas Advisors.
A nighttime view of the Torrance Refinery, an oil refinery operated by PBF Energy, in Torrance, California, U.S., March 10, 2022. Picture taken March 10, 2022. Picture taken with a drone. REUTERS/Bing Guan (Reuters Photos)
Diesel stocks in particular "are well below typical levels and are running at some 20% below the seasonal average," Paisie said. He expects utilization in the U.S. "will continue to be relatively high and will average around 90% in 4Q."