Marathon Petroleum Corp. is operating refineries at minimum rates but sees signs of recovery in demand for gasoline amid the coronavirus crisis, executives said on Tuesday.
On the West Coast, the largest U.S. oil refiner is running plants at about 50 per cent capacity, compared with an average of 66 per cent to 67 per cent overall.
“The West Coast demand drop was even more severe than the whole national average,” Chief Executive Officer Mike Hennigan said on the company’s earnings call.
Gasoline demand bottomed out after falling by more than 50 per cent in mid- to late March, but has recovered by 5 per cent to 15 per cent since mid-April, dependent on the region, according to Speedway President Tim Griffith.
Griffith noted a clearer understanding of the demand environment is still a few months away and contingent upon consumer sentiment and the lifting of stay-at-home orders.
“We’re still oversupplied on pretty much crude and products across the board,” said Hennigan.
Executives said the company would not bring its idled Gallup, New Mexico, and Martinez, California, refineries back online until “the market requires it” but noted that the refineries are expected to come back online by the end of the year.
Net loss attributable to Marathon was $9.2 billion, or $14.25 per share, in the first quarter, as it booked $12.4 billion in charges related to inventory writedowns and goodwill impairment.
The U.S. refiner cut spending by 30 per cent and detailed other measures to reduce costs, as widespread lockdowns to curb the spread of the COVID-19 pandemic pummel demand for oil and gas.
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