NEW YORK -- Valero Energy Corp., the nation’s largest independent refiner, disclosed details of refinery-run reductions it recently made due to low margins.
On the news -- as well as a Reuters report that Iran is calling for additional output cuts by the Organization of Petroleum Exporting Countries -- gasoline for February delivery rose by 1.13 cents a gallon on the New York Mercantile Exchange, off its early high of 55.40 cents.
San Antonio, Texas,-based Valero said Tuesday it has cut output at its 12 U.S. refineries by 265,000 barrels per day (bpd), or 18 percent, due mostly to poor refining margins. Company officials told Reuters it plans to cut an additional 425,000 bpd, which represents 28 percent of its total U.S. production, in February.
Refining margins have been poor for more than a month due to demand concerns that have cut into prices for heating oil and gasoline, leading refiners to cut back production and to do seasonal plant maintenance early.
A meeting between Russian Prime Minister Mikhail Kasyanov and heads of oil producers yesterday to discuss a domestic glut of petroleum products left export rules intact, a sign Russia was complying with output cut agreement with OPEC, Reuters reported.
The American Petroleum Institute’s weekly stocks data, delayed by one day due to the Martin Luther King Day holiday, are due to be released this afternoon. The Energy Information Administration will follow with its weekly data Thursday. According to Reuters, early forecasts on the API data call for a decline in distillate stocks, including heating oil, of up to 2.0 million barrels for the week ended Jan. 11.
