U.S. refiner Phillips 66 beat Wall Street estimate for first-quarter profit on May 3, joining rivals in gaining from elevated margins on sustained fuel demand amid tight crude supplies.
The company's shares rose 1.3% to $95.98 in morning trade.
Profits from turning crude oil into gasoline, diesel and jet fuel surged as supplies remained tight due to pandemic-era closure of facilities and a recovery in demand.
Margins were also supported by Russia's invasion of Ukraine last year that further tightened supplies.
Realized margins soared 91% to $20.72 per barrel in the first quarter from a year earlier, Phillips 66 said.
Margins jumped nearly 71% at Marathon Petroleum and 84% at Valero Corp, helping the company's rivals report bumper first-quarter profits that also beat estimates.
Phillips 66's crude utilization rate was 90% in the reported quarter, marginally higher than last year's 89%, while total processed input fell to 1.8 million barrels per day (bbl/d) from 1.9 million bbl/d.
"Refining drove the beat...We expect 2023 to be a lower turnaround year for PSX, with most of the work front-loaded in 1Q," said RBC Capital Markets analyst TJ Schultz.
U.S. refiners took up major maintenance activities during the first three months of 2023 after running their facilities at almost full capacity last year to keep up with the recovery in demand.
"We ran above industry-average crude utilization, successfully executed major turnarounds and increased market capture to 93%," Phillips 66's CEO Mark Lashier said in a statement.
The Houston-based refiner reported adjusted earnings of $4.21 per share for the three months ended March 31, compared with average analyst estimate of $3.56, according to Refinitiv data.
Recommended Reading
Technip Energies Wins Marsa LNG Contract
2024-04-22 - Technip Energies contract, which will will cover the EPC of a natural gas liquefaction train for TotalEnergies, is valued between $532 million and $1.1 billion.
Vår Selling Norne Assets to DNO
2024-05-08 - In exchange for Vår’s producing assets in the Norwegian Sea, DNO is paying $51 million and transferring to Vår its 22.6% interest in the Ringhorne East unit in the North Sea.
SLB OneSubsea JV to Kickstart North Sea Development
2024-05-07 - SLB OneSubsea, a joint venture including SLB and Subsea7, have been awarded a contract by OKEA that will develop the Bestla Project offshore Norway.
CNOOC Makes 100 MMton Oilfield Discovery in Bohai Sea
2024-03-18 - CNOOC said the Qinhuangdao 27-3 oilfield has been tested to produce approximately 742 bbl/d of oil from a single well.
Proven Volumes at Aramco’s Jafurah Field Jump on New Booking Approach
2024-02-27 - Aramco’s addition of 15 Tcf of gas and 2 Bbbl of condensate brings Jafurah’s proven reserves up to 229 Tcf of gas and 75 Bbbl of condensate.