Phillips 66 expects tight gasoline, diesel supplies in summer -executive

Jan 5 (Reuters) - U.S. oil refiner Phillips 66 expects supplies of gasoline and diesel to be tight this summer, a top executive said on Thursday during a presentation at the Goldman Sachs Global Energy and Clean Technology Conference.

Refiners have been running at near full capacity for months as demand for gasoline and diesel roared back as pandemic travel restrictions ended and Europe sought alternatives to Russian fuel exports.

U.S. processing plants

were forecast to operate at about 93% of capacity

in the fourth quarter and have been running in excess of 90% since March, according to U.S. data.

Globally, there has been a loss of about 4.7 million barrels per day of processing capacity, said Jeff Dietert, a Phillips 66 vice president. Less capacity has driven up refiners' profit margins and utilization rates as demand recovered.

"Last summer, we saw demand back close to 2019 levels and saw margins, frankly, I didn't think we'd see and hadn't seen historically," said Dietert.

"As we approach the summer driving season, we expect gasoline and diesel to be tight again this summer," he said.

U.S. gasoline and diesel stocks fell last week, the U.S. Energy Information Administration reported on Thursday.

Another U.S. refinery, Lyondell Basell Industries 's 263,776 barrel-per-day (bpd) Houston refinery, is scheduled to close by the end of this year, further reducing U.S. capacity.

The loss will be mitigated by the planned expansion of Exxon Mobil Corp's Beaumont, Texas, refinery's coming on-line. It could add about 250,000 bpd capacity.

Phillips 66 Chief Executive Mark Lashier said the Houston-based company is working to better integrate its seven U.S. refineries.

"We want to standardize the way we run our refinery business, we want to optimize across the platforms, technologies that we've put in place will enable that," Lashier said. "We really think it's the way to position ourselves competitively."

Kevin Mitchell, chief financial officer, said the company plans to return its Rodeo, California, refinery to production in 2024 after completing the conversion of the plant to renewable diesel.

"That's another approximately $700 million of EBITDA, which is going to translate into about the same from a cash standpoint," Mitchell said of the financial gains expected from the converted refinery. (Reporting by Erwin Seba; Editing by Leslie Adler)