NEW YORK (Reuters) - Phillips 66 has cut production by roughly five percent at its 238,000 barrel-per-day refinery in Linden, New Jersey, amid weak refining margins, according to a source familiar with the plant’s operations.
Phillips 66 joins Monroe Energy’s 185,000 barrel-per-day refinery in Trainer, Pennsylvania, in making economic run cuts on the East Coast. Monroe Energy, a subsidiary of Delta Air Lines, continues to run the refinery at roughly 150,000 bpd following run cuts that began in July, a source said Tuesday.
Phillips 66 did not immediately return a request for comment.
The U.S. gasoline crack spread, an indicator of how much refiners make from converting a barrel of oil into a barrel of gasoline, remains at its lowest level in the past five years.
The U.S. diesel crack spread also remains at five-year lows.
U.S. and global refining margins have been hurt by historically high gasoline and diesel inventories. Refining executives and analysts across the globe are predicting refiners are going to be forced to scale back production to reduce inventories, balance the market and boost margins.
East Coast refineries see some of the weakest margins due in part to their supply constraints, and experts predict they would be among the first to cut runs.
Philadelphia Energy Solutions, the largest East Coast refinery, is currently running at full capacity, a source told Reuters Tuesday. It was not immediately known whether PBF Energy has made cuts at either of its East Coast refineries, one in Delaware City, Delaware and the other in Paulsboro, New Jersey.
PBF plans on shutting down the 55,000 bpd gasoline-making unit at its Paulsboro refinery in mid-September for up to eight weeks of planned work.
Reporting By Jarrett Renshaw; Editing by Chizu Nomiyama and Alistair Bell