May 9, 2022 [Reuters] – U.S. refiner Marathon Petroleum (MPC.N) on Tuesday posted a first-quarter profit above Wall Street estimates buoyed by strong refining margins, as demand for fuel and refined products recovered to near pre-pandemic levels amid tight supplies.
Shares of the company rose 3.8% to $92.48.
Global fuel demand has recovered, while Western sanctions on Russia following its invasion of Ukraine have tightened crude oil supplies worldwide.
“Year-over-year, demand trends have been, for the most part, positive and the market seems to have reached a post-COVID point of stability,” Chief Executive Officer Michael Hennigan said on a post-earnings call.
The company expects the U.S. refining system running at higher utilization rates in the coming quarters to meet rising demand.
Overall product supplied, a proxy for demand, stood at 19.8 million barrels per day (bpd) in the fourth week of April, near pre-pandemic trends, according to U.S. Energy Information Administration data.
Marathon said its refining and marketing margins jumped nearly 51% to $15.31 per barrel in the quarter ended March 31.
Crude capacity utilization was 91%, resulting in total throughput of 2.8 million bpd, compared with an 83% utilization and total throughput of 2.6 million bpd a year earlier.
For the current quarter, it expects throughput of 2.9 million bpd.
The refining and marketing segment’s profit from operations stood at $768 million, compared with a loss of $598 million last year.
The Findlay, Ohio-based refiner said net profit came in at $845 million, or $1.49 per share, for the reported quarter, compared with a loss of $242 million, or 37 cents per share, a year earlier.
Analysts were expecting a profit of $1.11 per share, according to Refintiv IBES.
Marathon’s results followed strong earnings from other energy companies, including Valero Energy Corp (VLO.N) and Phillips 66 (PSX.N).
Pro Trial: Access 10,390 Tank Terminal and Production Facilities
10,390 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data
