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U.S. crude oil refiners expect to operate above 90% of their combined processing capacity for the rest of Q2 after completing planned overhauls, Reuters reported Friday in a survey of analysts.
During January and February, the most recent months for which data is available, U.S. refineries ran at an average 86% of their combined processing capacity of 18.1M bbl/day, according the U.S. Energy Information Administration; the 90% target is below the industry's 93% capacity achieved in the year-ago Q2.
"From a profitability standpoint, it's setting up to be a pretty good summer," Tudor Pickering Holt's Matthew Blair told Reuters, adding that refiners were completing overhauls in April and ramped up production in May.
No. 1 U.S. refiner Marathon Petroleum (MPC) said last month it expected to run its refineries at 94% of their combined 2.9M bbl/day capacity during Q2, up from 82% during heavy maintenance in Q1.
No. 2 refiner Valero Energy (NYSE:VLO) said it plans to run its refineries up to 95% of their combined total production capacity.
Separately, Morgan Stanley analysts said this week it sees weakness in refining margins as temporary and predicted widening margins in the coming months.
Despite some modest U.S. gasoline demand destruction, global demand for motor fuel has surprised to the upside, with gains of ~95K bbl/day.
Refining stocks finished broader higher in Friday's trading, including Valero (VLO) +4.1%, HF Sinclair (DINO) +4.1%, Phillips 66 (PSX) +2.7%, Marathon Petroleum (MPC) +2.6%, Delek US (DK) +1.5%.
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