• 4 minutes Why Trump will win the wall fight
  • 7 minutes Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 12 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 5 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 3 hours Itt looks like natural gas may be at its lowest price ever.
  • 5 hours America’s Shale Boom Keeps Rolling Even as Wildcatters Save Cash
  • 17 hours North Korea's Kim To Travel To Vietnam By Train, Summit At Government Guesthouse
  • 19 hours Oil imports by countries
  • 19 hours AI Will Eliminate Call Center Jobs
  • 23 hours NZ Oil, Gas Ban Could Cost $30 Bln
  • 8 hours US-backed coup in Venezuela not so smooth
  • 2 hours Amazon’s Exit Could Scare Off Tech Companies From New York
  • 1 day Ayn Rand Was Right
  • 1 day Solar and Wind Will Not "Save" the Climate
  • 1 day Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 6 hours Some Good News on Climate Change Maybe

Cheap Canadian Oil Boosts Marathon Petroleum Q4 Refinery Runs

Marathon Petroleum

Refinery runs at Marathon Petroleum (NYSE:MPC) jumped by 56 percent in the fourth quarter of 2018 from the same period of 2017, driven by the combination with Andeavor and the huge discount of Canadian oil to WTI, the largest U.S. independent refiner said on Thursday.

Marathon Petroleum’s total refinery utilization stood at 94 percent in Q4 2018, with total throughputs of 3.1 million barrels per day, compared to 2.0 million bpd in Q4 2017, the company said in its 2018 results release.

“The increase in quarter-over-quarter segment results was primarily due to higher throughputs as a result of the Andeavor combination as well as wider WCS- and WTI-based crude differentials,” Marathon Petroleum said.

Income from operations in the refining and marketing segment jumped to US$923 million in Q4 2018 from US$732 million in Q4 2017, driven by high utilization and wide crude differentials. The refining and marketing (R&M) margin per barrel also jumped in Q4 2018—to US$15.07 from US$13.12 in Q4 2017.  

Marathon Petroleum’s margins at the end of last year were also boosted by the ultra-cheap Canadian crude processed at its Midwest refineries.

As Canadian oil production was growing last year, takeaway capacity constraints and maintenance at U.S. refineries in the fall of 2018 drove down the price of Western Canadian Select (WCS)—the benchmark price of oil from Canada’s oil sands—to as low as US$14 a barrel in October and November, with its discount to WTI at around US$50 a barrel.

In early December, the Alberta government moved in to shore up the price of Canadian heavy oil and in the most drastic measure yet, the province of Alberta mandated an oil production cut of 325,000 bpd for three months starting January 2019.  

Canada’s heavy oil price has recovered since the oil production cut began, with the discount to WTI narrowing to its lowest in a decade at the beginning of January.

Last week, the Alberta province said it was easing the production cuts in February and March to 3.63 million bpd, which is a 75,000-bpd increase from the January limit of 3.56 million bpd, after analyzing data that suggested oil storage levels had been decreasing roughly one million barrels per week since the start of 2019 and are on track to continue clearing the storage glut.

“We will adjust these production levels as necessary going forward and we will not waver in our fight for a Made-in-Alberta strategy to build new pipelines, access new markets and add value that creates jobs by upgrading more of our oil and gas here at home,” Alberta Premier Rachel Notley said last week.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News