The coronavirus pandemic has put prices and profit margins of motor and aviation fuels under heavy pressure as governments enforce lockdowns and airliners cancel flights, forcing refiners to slash their throughput.
In the US, Refining margins for gasoline and jet fuel have dropped due to weak demand amid restricted transportation. As a result, refiners boosted ultra-low sulfur diesel output to escape the squeezed margins for other products, but this caused an oversupply and margins for this fuel have plummeted as well.
In Asia, flight cancelations have pushed profit margins for jet fuel into negative territory for the first time in more than ten years. In Europe, profit margins for jet fuel plunged to a near 17-year low last week.
Due to the weak demand, Colonial Pipeline Co last week said that it would reduce volumes at its primary US East Coast-Gulf Coast lines. ExxonMobil cuts production at its 502,500-bpd Baton Rouge refinery in Louisiana on Saturday. Meanwhile, Chevron reduced output at its 269,000-bpd California refinery.
Delta Airlines, which operates the 190,000-bpd refinery in Trainer, cut production in the facility by 40,000 bpd. Total delayed the restart of its 102,000 bpd Grandpuits refinery in France. Taiwan’s CPC also plans to lower the crude throughput by less than 10% in April. CPC’s crude throughput has been lowered to 70%-80%.
