Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Marathon Petroleum expects lower quarterly throughput on fuel demand woes

Published 08/04/2021, 06:44 AM
Updated 08/04/2021, 12:31 PM
© Reuters. FILE PHOTO: A Marathon Petroleum banner outside the El Paso refinery in El Paso, Texas, U.S., October 1, 2018.   REUTERS/Julio-Cesar Chavez

© Reuters. FILE PHOTO: A Marathon Petroleum banner outside the El Paso refinery in El Paso, Texas, U.S., October 1, 2018. REUTERS/Julio-Cesar Chavez

By Arathy S Nair

(Reuters) -U.S. oil refiner Marathon Petroleum Corp (NYSE:MPC) said it expects to process slightly less crude in the third quarter compared with the second, as the summer driving season comes to an end and the spread of the highly contagious Delta variant of the coronavirus threatens fuel demand recovery.

While refiners ramped up crude processing in the second quarter as U.S. gasoline and diesel fuel demand nearly recovered to pre-pandemic levels, the Delta variant could still sap travel demand, cutting consumption of refined products.

"As we head into the second half of the year, we remain hopeful but cautious in the recovery," Chief Executive Officer Michael Hennigan said.

"The reason we're still cautious, however, is the delta variant is spiking up in a lot of areas...We're going to have to see how the COVID plays itself out into the second half of the year and as we approach another winter season."

Shares of the company were down 2.1% at $54.76, amid a broader drop in oil prices.

Marathon Petroleum forecast current-quarter throughput, the amount of crude processed, of 2.8 million barrels per day, compared with 2.9 million bpd in the second quarter ended June 30.

Gasoline demand was currently 2% to 5% below 2019 levels, while jet fuel demand was down nearly 30% below pre-pandemic levels, Hennigan said.

Marathon's adjusted second-quarter earnings of 67 cents per share was its first since the pandemic, also beating analysts' estimate of 39 cents, as more vaccinations and lower travel restrictions boosted demand for refined products.

© Reuters. FILE PHOTO: A Marathon Petroleum banner outside the El Paso refinery in El Paso, Texas, U.S., October 1, 2018.   REUTERS/Julio-Cesar Chavez

Refining and marketing margins rose 23% to $12.45 per barrel in the second quarter, while crude capacity utilization rose to 94% from 83% in the first.

Rival Phillips 66 (NYSE:PSX), which also posted its first adjusted quarterly profit in more than a year, said on Tuesday market conditions in the third quarter would determine refinery utilization levels.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.