Marathon Petroleum barely ekes out a profit due to weak crack spreads

Marathon Petroleum net attributable income slumped to $1 million, or less than 1 cent per share. Marathon Petroleum Twitter photo.

April 28 (Reuters) – Refiner Marathon Petroleum Corp barely eked out a profit in the first quarter, hurt by weak crack spreads – the difference between the prices of crude oil and refined products.

Net income attributable to the company slumped to $1 million, or less than 1 cent per share, in the three months ended March 31, from $891 million, or $1.62 per share, a year earlier.

The drastic decline in profit was also a result of higher turnaround activity, or scheduled events where an entire unit is taken offstream for an extended period for a revamp or renewal.

Marathon also took an impairment charge of $129 million in the latest quarter.

Refiners have seen their margins shrink due to the narrowing price difference between U.S. Crude and globally traded Brent futures, to which the price of refined products are tied.

“Despite weakness in refining margins in the first two months of the year, we saw crack spreads strengthen late in the quarter as gasoline inventories declined and refiners responded to market conditions,” Chief Executive Gary Heminger said in a statement on Thursday.

Marathon’s revenue and other income fell 25.6 percent to $12.75 billion.

As part of its turnaround work, Marathon commissioned a light crude upgrade project at its Robinson, Illinois refinery to increase its overall processing capacity by 20,000 barrels per stream day (bpsd)

The upgrade is also to boost by 30,000 (bpsd) its light crude capacity, the quantity of oil product produced by a single refining unit during continuous operation for 24 hours.

Up to Wednesday’s close of $41.37, the company’s shares have slumped more than 19 per cent in the last 12 months.

(Reporting by Vishaka George in Bengaluru; Editing by Anil D’Silva and Savio D’Souza)