Marathon Petroleum And Phillips 66 Cruise Past Estimates On Fuel Demand Surge
11.07.2022 By TankTerminals.com - NEWS

November 7, 2022 [OAN] – Marathon Petroleum and Phillips 66 posted quarterly profits which cruised past Wall Street estimates on Tuesday, becoming the latest U.S. refiners to benefit from robust fuel demand and margins amid tight supplies.

 

U.S. refiners are posting strong profits with refineries running at record levels this year, strong export demand amid a squeezed supply due to Russia’s invasion of Ukraine and plant closings.

The sector has, however, drawn criticism from President Joe Biden, who said refiners were putting profits ahead of consumers and urged them to expand capacity.

Shares of Marathon rose as much as 4% to their all-time high of $118.09, while Phillips 66 jumped 5% to $109.66.

Top bosses of both refiners said market environment continues to be favorable and product demand remains strong.

“As supply remains constrained and demand continues to rebound, we maintain a bullish outlook towards the refining environment as we look into 2023,” said Michael Hennigan, Marathon’s chief executive officer, on a call.

Marathon, the largest U.S. refiner by capacity, said quarterly crude capacity utilization was about 98%, resulting in total throughput of 3 million barrels per day (bpd), 7% higher than a year earlier.

For the current quarter, it expects refinery throughput to be 2.9 million bpd.

Amid the bumper results, Marathon also increased its dividend by 30% to 75 cents per share and expects to commence share buy backs in November using the remaining $5 billion repurchase authorization.

“Marathon’s strong financial position and sizable share repurchase program should provide downside protection if oil demand falls…see an opportunity for increasing cash returns,” said Faisal Hersi, an analyst at Edward Jones.

Marathon’s refining and marketing margin doubled to $30.21 per barrel for the reported quarter compared with a year earlier.

Mirroring similar gains, rival Phillips 66’s realized refining margins tripled in the July-September quarter to $26.58 per barrel.

“(PSX) quarterly results were solid, in our view, as all four segments exceeded expectations, but the refining segment led the way,” Hersi added.

Phillips said it returned $1.2 billion through share repurchases and dividends during the quarter.

On an adjusted basis, Marathon reported a profit of $7.81 per share, beating average analysts’ estimate of $7.07, while Phillips 66’s adjusted profit of $6.46 per share smashed estimates of $5.04, according to Refinitiv data.

Pro Trial: Access 10,390 Tank Terminal and Production Facilities

Book a demo to see how to offer, bid and book tank capacity globally. Quick and easy.

ArcelorMittal Poland Plans to Build a Hydrogen Production Plant in Krakow
11.22.2024 - NEWS
November 22, 2024 [Gmk Center]- An investment of more than PLN 100 million will provide hydrogen ... Read More
Clean Hydrogen Works Awards McDermott FEED Contract for Ascension Clean Energy (ACE) Project
11.22.2024 - NEWS
November 22, 2024 [Mcdermott]- Clean Hydrogen Works (CHW) and McDermott announce that CHW has awa... Read More
MOL Group Signed Cooperation Agreement with KazMunayGas
11.22.2024 - NEWS
November 22, 2024 [World Pipelines]- MOL Group and Kazakhstani national oil company KazMunayGas (... Read More
Dialog's 1Q profit grows 14%, driven by midstream tank storage business and big opex drop
11.22.2024 - NEWS
November 22, 2024 [The Edge Malaysia]- Dialog Group Bhd’s net profit in the first quarter e... Read More