With new refining+ capacity coming online and refined product demand faltering in the Uni last year, hurt by tumbling refining margins, sending shares of the U.S. refiner down 3.2% in morning trade.ted States and China, the two largest oil consumers, energy companies worldwide have taken an earnings hit.
Weak margins also pushed U.S. oil major Chevron’s refining business into a quarterly loss for the first time since 2020.
Phillips said quarterly realized refining margin tumbled 56% to $6.08 per barrel, from a year earlier, while quarterly crude capacity utilization stood at 94%, compared with 92% from a year earlier.
The company’s refining unit posted a loss of $775 million in the quarter, compared with a profit of $859 million last year.
Phillips 66 now expects heavy maintenance at its refineries in the current quarter with utilization forecast to be in the low 80%, compared with 92% utilization a year ago.
The turnaround expenses are expected to be between $290 million and $310 million for the quarter ending March 31, more than double the $124 million from a year earlier.
The Houston, Texas-based company’s renewable fuels segment provided some cushioning, helping it post better-than-feared quarterly results.
The renewable fuels segment, which produces sustainable aviation fuel among others, reported a quarterly profit of $28 million, compared to a loss of $11 million a year earlier, driven by higher margins at its Rodeo Complex in San Francisco and strength in international markets.
Reporting by Tanay Dhumal in Bengaluru; Editing by Tasim Zahid – Reuters