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Phillips 66 quarterly profit beats on higher refining margins

February 12/2019

MOSCOW (MRC) -- US refiner Phillips 66 posted a better-than-expected profit as access to low-cost crude oil from U.S. shale basins and Canada boosted its refining margins, sending its shares up 5 percent in premarket trading, reported Reuters.

Tight pipeline capacity in the US shale basins and Canada has pushed the price of crude oil from those regions lower, benefiting Phillips 66 as well as its rivals.

The refiners utilization rate, the percentage of the total equipment or refinery involved in processing crude, touched 99 percent, while refining margins jumped 84 percent to USD16.53 per barrel of oil, over the same period a year earlier.

"The system ran well and capture rates were well above our forecast, retail clearly witnessed the benefit of sticky margins in the face of collapsing crude prices," Piper Jaffray analyst Blake Fernandez said in a note.

The Houston, Texas-based company, which sells its fuel under different brand names including Conoco, 76 and JET, said earnings from its marketing and specialties business surged more than three-fold to USD589 million.

Phillips 66, which also reported higher earnings in its midstream and chemicals units, said last week that it is confident on securing alternative sources of oil, after U.S. sanctions on Venezuelas state-owned oil company PDVSA took away about 500,000 barrels per day of oil from the US market.

Larger rival Marathon Petroleum Corp said on Thursday it would replace Venezuelan crude with imports from Middle East and Latin America.

On an adjusted basis, Phillips 66s profit rose to USD2.26 billion, or USD4.87 per share, in the quarter, from USD548 million, or USD1.07 per share, a year earlier.

Analysts on average were expecting the company to post a profit of USD3.01 per share, according to IBES data from Refinitiv.

The companys total revenue and other income fell nearly 1 percent to USD29.84 billion.

As MRC wrote previously, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018,
Author:Margaret Volkova
Tags:shale gas, crude and gaz condensate, propylene, ethylene, petrochemistry, Chevron Phillips, Phillips 66, USA.
Category:General News
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