By Arathy S Nair
(Reuters) -U.S. oil refiner Marathon Petroleum Corp 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.
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, 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.
(Reporting by Arathy Nair in Bengaluru; Editing by Krishna Chandra Eluri)