Biggest US oil refinery Marathon reports $9.2bn loss
The US refiner cuts spending by 30%
New York — Marathon Petroleum, the largest US oil refiner, posted a net loss of $9.2bn for the first quarter and said it was operating refineries at minimum rates amid the coronavirus crisis, executives said on Tuesday.
The refiner is running plants at about 50% capacity, compared with an average of 66% to 67% overall.
“The West Coast demand drop was even more severe than the whole national average,” CEO Mike Hennigan said on the company's earnings call.
Net loss attributable to Marathon was $9.2bn, or $14.25 per share, in the first quarter, after a loss of $7m, or 1c a share, in the year-earlier period. It booked $12.4bn in charges related to inventory writedowns and goodwill impairment. Revenue fell to $25.2bn from $28.2bn a year ago.
The refiner cut spending by 30% and detailed other measures to reduce costs, as widespread lockdowns to curb the spread of the Covid-19 pandemic pummel demand for oil and petrol.
Fuel demand bottomed out after falling by more than 50% in March, but has recovered by 5% to 15% since mid-April, depending 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.