REFINERY NEWS: Phillips 66 nears minimum rates at its plants as both domestic and export demand fall

New York — Refineries: 13 refineries in the United States and Europe

Owner: Phillips 66

Capacity: 2.2 million b/d

Duration: Ongoing

Notes: Phillips 66 is nearing minimum rates at its refineries, seeking to cut output to meet falling demand resulting from the COVID-19 pandemic, the company said Tuesday on a special call.

"We're nearing kind of minimum crude rates in many of our refineries today," said Bob Herman, Phillips 66's head of refining.

Herman was speaking on a call to discuss Phillips 66's response to the rapidly falling demand for oil products, particularly gasoline, in light of the COVID-19 virus which has spawned stay-at-home policies across the globe.

"We're trying to stay out in front of the demand as it comes down and cutting back," he added.

Herman said most refineries are unable to go down as far as a range around 60%, as lower crude throughput means that some of the conversion units like hydrocrackers and fluid catalytic cracking units will not have enough feed to keep them online.

Demand for refined products from non-US customers is also falling. Latin American customers are asking to back out of cargoes, the company said.

"We're seeing gasoline cracks negative margins. We're seeing jet cracks even worse. Distillate cracks are still holding up around the US, but we're seeing even our Latin American customers asking us if they can back out of cargoes now," Brian Mandell, head of marketing and commercial activities, said on the call.

"So we see that the demand is starting to move toward demand destruction starting to move toward Latin America," he added.