(Reuters) – U.S. refiner Marathon Petroleum Corp (NYSE:MPC) reported a 63% drop in second-quarter profit on Tuesday, as improved fuel supplies and slowing economic activity compressed its margins.

Despite a resilient fuel demand in the U.S., an increase in global refining capacity compared with last year and slowing economic activity has brought the market down from the peaks seen in 2022.

Marathon said crude capacity utilization was 93%, compared with 100% a year earlier, due to planned maintenance activity in the Mid-Continent and West Coast regions, resulting in a total throughput of 2.9 million barrels per day (bpd) for the reported quarter.

Refining and marketing margin was $22.10 per barrel for the April-June quarter, down from $37.54 per barrel a year earlier.

The Findlay, Ohio-based refiner said net income attributable to company stood at $2.2 billion, or $5.32 per share, for the three months ended June 30, compared with $5.9 billion, or $10.95 per, a year earlier.

On an adjusted basis, Marathon reported earnings of $5.32 per share, beating average analysts’ estimate of $4.59 per share, on the back of improvement in refining costs and lower tax rate.

Rival Valero Energy Corp (NYSE:VLO) last week also saw its quarterly profits dwindle as refining margins came under pressure, but beat estimates on strength in its renewable diesel business.