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Marathon says pipeline woes, storms hurt output

HOUSTON — Marathon Oil Corp. said Tuesday its oil and natural-gas production in the fourth quarter was probably at the low end of its previous guidance range, in part from pipeline problems overseas and disruptions linked to last summer's hurricanes in the Gulf of Mexico.

Marathon owns the oil refinery in Catlettsburg, Ky., which it bought from the company previously known as Ashland Oil.

The Houston-based company estimated its liquid hydrocarbon and natural gas production available for sale during October-December was around 401,000 barrels of oil equivalent a day; the previous forecast was 400,000 to 440,000 barrels.

Marathon provided an overview of market conditions for October-December as all major oil companies prepare to report earnings for the fourth quarter.

After peaking above $147 a barrel in July, oil prices spent the remainder of 2008 falling fast. When the fourth quarter began Oct. 1, crude was trading at about $100 a barrel. On Dec. 31, it settled at $44.60. Crude was trading below $40 a barrel Tuesday.

Marathon said its refined-products sales volume in the most recent quarter fell to 1.4 million barrels of oil equivalent a day, compared with 1.43 million barrels in the prior-year period.

It also said its refining and wholesale marketing gross margin for the fourth quarter will be about 12 cents per gallon, up from about 5 cents a gallon a year ago, helped by lower crude prices.

Marathon is the fourth-largest U.S. integrated oil firm, meaning it's involved in exploration and production as well as in refining and selling gas. It is to report fourth-quarter and '08 earnings Feb. 3.

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