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Profits for US refiners are running 32 per cent lower than last year, based on crude oil and fuel prices, and may drop further, researchers at Merrill Lynch & Co said. New York gasoline futures have tumbled 6 per cent this year, while crude oil has risen 1.2 per cent, leaving less money to be made on each barrel processed.

The lower profit from processing crude oil, also known as the "crack spread," may encourage refiners to cut back their output, which will eventually trim stockpiles. For now, the ample inventories are a boon for US motorists and may help hold down gasoline pump prices as demand rises in spring and summer.

The profit margin for turning three barrels of crude oil into two barrels of gasoline and one of heating oil averaged $7.433 a barrel this year, as opposed to $11.415 last year. The crack spread dropped to $1.747 on February 14, the lowest since 1994. It reached a record $28.761 on September 1.

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