Oil refiners from Valero Energy to Sunoco are cutting the most capacity since the early 1980s, anticipating that what is expected to be the coldest winter in a decade won’t be enough to soak up a glut of fuel.
The returns from processing crude into heating oil for delivery in February are the lowest in six years after the recession cut demand by the greatest amount since Jimmy Carter was president. The margins for making heating oil and diesel might decline 35 percent by January because of the increasing supply, according to Energy Security Analysis.
San Antonio-based Valero shut its Aruba plant, and Philadelphia-based Sunoco will idle its Eagle Point refinery in New Jersey. Across the U.S., the Energy Department forecasts heating costs this winter will fall 8 percent. Bloomberg News
