US Refining Seen Posting Worst Quarterly Results in Ten Years

It is expected that the American oil refineries will announce the worst results for the second quarter in ten years, with production exceeding the demand, while the lockdown measures aimed at containing the pandemic of the Covid-19 Virus caused a severe decline in travel in the summer. According to Reuters.

Fuel consumption has decreased, as the latest US data shows a 25% drop in car travel from last year and a drop in passenger at airports 75%. Refineries get the bulk of their profits from domestic fuel sales. The quarter ending in June is one of the most traveled seasons.

The largest seven independent refiners, including Valero Energy Corp, Philips 66, BPF Energy Inc. and Marathon Petroleum Corp, are expected to post losses.

The US Energy Information Administration data indicate that refining rates in refineries are still about 2.8 mbpd, or 17%less than the quarterly average over the past five years. Profits were also hit by higher stocks, as refiners boosted production in anticipation of a reopening of business activities.