Oil companies look at permanent refinery cutbacks

The L.A. Times reports:

Some of the nation's biggest oil companies are looking at permanently reducing how much gasoline and diesel fuel they make, a move that analysts say would almost certainly trigger higher prices for drivers.

Energy companies are suffering huge losses from refining because of slumping gasoline use -- a product of the economic downturn and changing consumer habits and preferences. Energy experts say refining cutbacks have already begun and will accelerate as corporations strive for profits.

Major refiners have been circumspect about their plans, saying they are considering options that could include closing refineries, selling parts of their operations, laying off workers or slashing spending.

"Refineries will have to be closed," said Fadel Gheit, senior energy analyst with Oppenheimer & Co. "Unless this excess capacity is permanently shuttered, a recovery in refining margins is unsustainable."

An article well worth your time.