NEW YORK—U.S. oil refiners are operating their plants at the lowest rates since October 2005 despite record-high retail prices for gasoline and diesel, according to government data released on Wednesday.
Refinery utilization fell last week by 1.6 percentage points to 82.2 percent of capacity, the lowest since the week ended Oct. 21, 2005, after two major hurricanes slammed into the Gulf Coast and flooded several plants, according to the U.S. Energy Information Administration.
The slowdown comes as refiners shut units for seasonal maintenance and slow down output further as the high cost of crude oil squeezes profit margins.
"The main feature in the data from our vantage point was the 1.6 percentage point cut in (refinery) runs that appeared to be of the voluntary or discretionary variety due to poor margins," said energy analyst Jim Ritterbusch of Ritterbusch and Associates.
Valero Energy Corp, the nation's biggest oil refiner, said Monday that it had cut back production from its gasoline making units across the United States to 73 percent of capacity because of poor profit margins.
A spokesman for San Antonio-based Valero said on Wednesday that the cuts were temporary and could be reversed if profit margins continue to improve.
The cutback in U.S. refinery activity contributed to a larger-than-expected decline in gasoline inventories last week of 3.3 million barrels—the second weekly decline in a row after supplies hit a 15-year high.
U.S. retail gasoline prices hit a record $3.26 a gallon last week, while diesel struck a record $4.06 a gallon, according to the Lundberg Survey of about 7,000 gas stations, released on Sunday.
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