Weak demand pushing refinery slowdowns
U.S. oil refineries are taking steps to slow production citing weak demand and anemic profits as the United States faces a prolonged recession.
Valero Energy said it would shut down a Texas City, Texas, refinery while parts of the facility undergo maintenance, the Houston Chronicle reported Thursday. Marathon Oil said it would trim its budget for refining, marketing and transportation by a third. Others, including ConocoPhillips and Sunoco have announced they would scale back upgrades and expansion projects, the newspaper said
While oil refineries have managed to avoid mass layoffs, the immediate future does not look bright for the industry, energy analyst Paul Cheng at Barclays Capital said.
We do not believe the U.S. and global refining markets will see any sustainable recovery until at the earliest in 2010, he told the Chronicle.