U.S refiner Phillips 66 posted its second straight quarterly profit on Friday as demand for gasoline, diesel and other distillates bounced back from pandemic lows thanks to vaccinations and easing restrictions.
Energy demand has recovered swiftly from the worst days of the COVID-19 outbreak in 2020, and Brent and U.S. crude oil prices have reached multi-year highs in recent weeks. But product demand has also increased, and that has helped boost margins.
“In refining, we saw a notable improvement in realized margins, operated well and navigated hurricane-related challenges,” Chief Executive Officer Greg Garland said.
Shares of Phillips 66 were up 3.2% at $79.20 in premarket trading.
The company’s refining business posted an adjusted pre-tax income of $184 million in the third quarter, compared with an adjusted pre-tax loss of $970 million last year.
Phillips 66’s realized refining margins jumped to $8.57 per barrel from $1.78 per barrel a year earlier.
Gasoline and distillate consumption in the United States is back in line with five-year averages after more than a year of weak demand due to the pandemic that had also knocked refining capacity offline.
Phillips 66 said its Alliance Refinery in Louisiana, which sustained significant impacts from Hurricane Ida, is expected to remain shut through the fourth quarter.
Total processed inputs rose 12.5% to 168.74 million barrels per day from a year earlier but fell 1.3% from the three months prior.
The Houston, Texas-based refiner said net income stood at $402 million, or 91 cents per share, for the three months ended Sept. 30, compared with a loss of $799 million, or $1.82 per share, a year earlier.
Excluding a $1 billion impairment charge, primarily due to Hurricane Ida’s impact on its Alliance Refinery, the refiner posted third-quarter adjusted earnings of $1.4 billion.
Rivals Valero Energy Corp and PBF Energy Inc reported strong results earlier this month, pointing to improving margins and tight inventories.
(This story has been refiled to correct day in first paragraph to Friday from Thursday)
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