U.S. oil refiners expect strong first-quarter gains as margins on gasoline and diesel sales have strengthened due to a sharp drop in refining capacity and tight crude oil supplies from Russia’s war with Ukraine.
Refining capacity around the world has plummeted during the coronavirus pandemic, with several less profitable oil refineries closing in the past two years.
However, worldwide fuel demand has recovered to near pre-pandemic levels, boosting profits for facilities that are still in operation.
Seven independent U.S. refining companies are expected to report a profit of $0.61 a share, compared with a loss of $1.32 in the first quarter of 2021, according to IBES data from Refinitiv.
Profit margins for the production of gasoline and its derivatives — diesel, jet fuel and heating oil — were already at their highest level in several years to 2022, and have increased since then.
Independent US refiners, including Marathon Petroleum Corp, Valero Energy Corp and Phillips 66, also benefited from a rise in natural gas prices in Europe, which occurred due to the risk of European sanctions on Russian energy exports.
“Geopolitical dynamics should support US refiners on wide natural gas spreads, although some impacts may be less visible with first-quarter earnings than in future quarters,” said Jason Gabelman, refining analyst at Cowen.
However, delays in refinery maintenance and rising crude oil prices could limit strong gains for some plants.
Analysts lowered estimates for Phillips 66 and PBF Energy Inc due in part to spring maintenance.
Source: CNN Brasil
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