NEW YORK – As record-high crude-oil prices have crimped profit margins, Valero Energy Corp. says its third-quarter earnings will be lower.

Valero is the latest oil company to highlight falling margins, The Wall Street Journal reports.

Because refiners are paying more for oil, the amount of money they make from turning crude into products such as gasoline and diesel has dropped. Oil companies are also paying more for labor and raw materials.

The company sees the higher crude oil costs cutting refining margins by about $700 million from the prior year. Also affected are many of the firm's other products, such as asphalt and lube oil. Prices for those items didn't rise as much as crude did, cutting margins for those products as well.

Marathon Oil Corp. said it expected the profit margin for its refining and wholesale marketing operations to be half of last year's because of crude oil's recent gains.

Late Tuesday, Chevron Corp. projected third-quarter earnings well below the prior quarter due to slumping refining margins, or the difference between the price oil companies pay for oil and the price of the products they produce with it.