US oil refiners to defy heat, run plants at mid-90% of capacity

Par Pacific Holdings

09/08/2023 17:34

By Erwin Seba
       HOUSTON, Aug 9 (Reuters) - Top U.S. oil refiners will
run their plants this quarter at up to 95% of their combined
17.9 million barrel-per-day capacity, according to executives
and analysts, defying this summer's extreme heat to pump out
more fuels.
    The refining industry has been running at above 90% of
capacity for more than a year on strong gasoline and diesel
demand - and high profit margins. 
    The new forecasts will be challenged by extreme heat that
has blanketed the main U.S. refining hub on the Gulf Coast this
summer, contributing to scattered outages, analysts said.  
    Marathon Petroleum  MPC.N , the largest refiner with 13
processing plants that provide 16% of U.S. refining throughput,
aims to run at 94% of its combined 2.9 million barrels per day
(bpd) capacity in the third quarter, executives said last week.
    The second-largest U.S. refiner,  Valero Energy  VLO.N ,
aims to process at up to 95% of its 3 million-bpd capacity. 
    Among smaller refiners, Par Pacific  PARR.N  aims to operate
at 92% of its capacity, and HF Sinclair  DINO.N  is targeting
94% of crude oil throughput, officials said. 
    “We continue to hear calls for higher refining utilization
and see a market supported by low inventories and sustained
consumer demand,” PBF Energy  PBF.N  Chairman Thomas Nibley told
investors on its second-quarter earnings call. 
        U.S. refinery rates rose last week to just under 94% of
total capacity, and averaged around 93.6% in the quarter so far,
compared with 92.8% between July and September last year,
according to government data.  EIA/S 
  
        Meanwhile, stockpiles of gasoline and distillates, which
include heating oil and diesel, fell sharply last week and were
respectively 7% and 17% below the five-year average for this
time of year. 
  
         
    HEAT, HURRICANE RISKS
    PBF did not disclose its goal, but Nibley said demand is
"continuing the call for high utilization."
    Phillips 66  PSX.N  laid out plans to run its U.S.
refineries this quarter in the "mid-90s%" rates. 
    Neither oil majors Chevron  CVX.N  nor Exxon Mobil  XOM.N 
disclose run rates. 
    This summer's extreme heat and the move deeper into peak
hurricane season could cut into production targets, said Andrew
Lipow, president of refinery operations experts Lipow Oil
Associates. 
    “I would expect the refiners plan to run full out to the
extent it’s possible to do so,” Lipow said.
    The hurricane-prone Gulf Coast region will carry much of the
processing load this quarter as refineries in the upper Midwest
and Rocky Mountain regions will cut back production for planned
overhauls, said John Auers, managing director of refined fuels
analytics. 


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 (Reporting by Erwin Seba in Houston
Editing by Marguerita Choy)
 ((erwin.seba@thomsonreuters.com; +1 832 746 4269; Reuters
Messaging: erwin.seba.thomsonreuters.com@reuters.net))