Frontier cuts Cheyenne rates on poor economics

TORONTO (Reuters) – Frontier Oil expects to run its Cheyenne, Wyoming refinery at lower rates in January due to weak economic conditions and higher crude costs, a company spokeswoman said Wednesday.

“The decline in the November/December light/heavy crude differentials increased our incentive to run a light crude slate, which limits our total capacity in Cheyenne,” said Kristine Boyd, a spokeswoman for the refinery.

The light/heavy crude differential last week increased 71 cents to $7.70 a barrel based on the benchmark WTI/Maya spread, according to Credit Suisse.

Frontier estimates the 52,000 bpd Cheyenne refinery will process 37,000 bpd in January, operating at 71 percent of capacity. In December, the refinery ran at 40,800 bpd.

“Beyond this, margins are weak and do not support maximizing output,” said Boyd.

Reuters