According to the Futu News app, some top U.S. refiners are reducing operational capacity of their refining facilities this quarter, intensifying concerns over the global oversupply of crude oil.

It is reported that Marathon Petroleum (MPC.US), the owner of the largest refinery in the United States, plans to operate its 13 refineries at an average utilization rate of 90% this quarter, the lowest level since 2020. Meanwhile, PBF Energy (PBF.US) announced plans to process the least amount of crude oil in three years, Phillips 66's (PSX.US) refineries are operating at their lowest level in nearly two years, and Valero Energy (VLO.US) is expected to cut its crude processing. These four companies together account for about 40% of U.S. gasoline and diesel production capacity.

Refinery utilization rates will gradually decline in the third quarter.

As a key factor in the global balance of crude oil supply and demand, U.S. refiners are stumbling due to stagnant consumption and shrinking profit margins. Slowing U.S. economic growth has increased the possibility of an oversupply of crude oil, despite OPEC+ cuts and escalating geopolitical tensions, limiting the rise in oil prices to about 7% so far this year. In addition, this trend is contrary to the International Energy Agency's (IEA) forecast, which expects global refinery crude oil processing to increase by nearly 0.9 million barrels this year.

Refining profit margins are shrinking due to the mismatch in timing of refinery closures, upgrades, and new capacity addition, as well as the growing popularity of electric vehicles and heavy trucks fueled by liquefied natural gas. Vikas Dwivedi, global oil and gas strategist at Macquarie Group, said: "Refining margins are being compressed, creating conditions for another round of large-scale refinery maintenance in the U.S. this fall." "This is putting pressure on the supply and demand balance of crude oil and could increase U.S. crude oil inventories for the rest of the year."

The United States has shipped some surplus crude oil to Dangote's large refinery in Nigeria, and Mexico's Dos Bocas refinery is also planning to come online this year. Although the number of new refineries is increasing, global crude oil supplies are expected to increase by the end of the year. Guyana has increased crude oil production, and OPEC+ plans to restore its production cut of about 540,000 barrels per day in the fourth quarter. In addition, oil wells drilled by U.S. shale oil producers earlier this year will also come online.

Vikas Dwivedi expects U.S. crude oil production to reach a record high of 13.8 million barrels per day this year, an increase of about 600,000 barrels per day from last year. He said the likelihood of oversupply is decreasing as geopolitical risks no longer offer premiums to oil prices, stating that "the market is no longer willing to pay a hefty premium for this, as geopolitical tensions have not yet led to production cutbacks in crude oil." He expects the average price of Brent crude oil in the fourth quarter to be $75 per barrel.