HollyFrontier has cut production at the independent U.S. refiner’s five refineries, with a combined crude oil throughput of 457,000 barrels per day (bpd), by an average 30% because of low demand amid the coronavirus crisis, a top executive said on Thursday, as reported by Reuters.
The company plans to operate its refineries at that level of production, which is in a range between 300,000 to 340,000 bpd, for the rest of the quarter, Senior Vice President Thomas Creery said.
U.S. refiners are cutting output, especially of gasoline, amid sharply lower demand for fuels due to travel and business restrictions due to the virus.
On Tuesday, Marathon Petroleum Corp, the largest U.S. refiner by capacity, said it plans to run its 15-refinery network about 32% below its 3.02 million-bpd capacity. Marathon has idled two smaller refineries in California and New Mexico.
Fuel demand has plunged by as much as 30 million bpd - or 30% - as efforts to fight the COVID-19 pandemic have grounded aircraft, reduced vehicle usage and pushed economies worldwide toward recession.
The United States on Thursday reported the number of people applying for unemployment benefits rose 3.169 million in the week ended May 2, bringing the total seeking benefits to about 33 million since March 21.
Creery declined to say by how much gasoline demand fell in the mid-continent and Rocky Mountain markets that HollyFrontier supplies from refineries in those areas.
Gasoline demand has increased between 10% and 15% in the past few weeks, he said.
“But the geography we serve tends to be opening more quickly than some of the coastal geographies,” Creery said. “So we see that as a positive, but it’s a tough call in terms of the pace or the trajectory.”
Reporting by Erwin Seba; Editing by Bernadette Baum and Jonathan Oatis
