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Phillips 66 (PSX)
NYSE - Nasdaq Real Time Price. Currency in USD
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As of 9:45AM EDT. Market open.
1,165 reactions on $PSX conversation
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VLO reported promising earning today, let's hope for the same for PSX.
Next time we see something approaching 90 I'm going to sell covered calls and hope for the best. Oil is not trading near it's value as no one seems to understand the real value of the energy industry in the US. All of us work for the oil companies in one way or another none of you can go 5min without buying or using and oil by product.
Serious question for the sages of the board ; why would anyone own $SHLX instead of something like $VLO $PSX or heck even $XOM ???
Fugly morning for VLO, MPC and PSX – listed in declining order of dependence on crack spreads.
Despite recent stock declines, I’m pleased to see OPEC losing some control. With the covid delta variant threatening the re-open trade in most major economies, OPEC would not have increased world oil production unless their leadership was threatened.
If the US can maintain growth in gasoline consumption and if – big “if”-- US refiners can control their tendency to overproduce fuel, a declining global crude price will lead to growing crack spreads and higher profits.
Of course, there is no guarantee as to when or if this happens, so I must advise caution, especially to those with short-term positions. On a long-term basis, I think the positive margin scenario for refiners has an increased likelihood... but I have been wrong before. On a long term basis, lower oil prices reduce the adaption rate of EVs.
As has recently been the case, the effect of the covid variants -- or the fear of such -- is the big unknown in any economic prediction. Refiners are included in energy funds, so this will affect price action -- at least temporarily. Final caveat: the market is never predictable.
So, I have a general question regarding this (yahoo finance) site....PSX closed a tad under $75 today. When I look at the Summary section of this site, its indicating an "overvalued" fair value, had a down arrow for the long term, but the one year estimate is north of $95. What am I missing? Has the price estimate not been revised? I'm newer here but don't understand? Any help please?
are we done slipping and sliding?
American Airlines warns about fuel shortages around the country, asks pilots to conserve
PUBLISHED MON, JUL 26 202112:53 PM EDTUPDATED 7 MIN AGO
Hope the mgt team wakes up and raises prices.
My only energy company that eeked out a gain today, not that it's enough to make me whole with psx
Quarterly dividend of 90 cents per share. Sounds like good news to me. Does that mean we will have a huge beat of expected EPS?
Oil trying so hard to sell off and no one is buying it. We all see demand escalating, prices increasing and long term stability. Whichever narrative the media is trying to manufacture is not sticking the landing.
we are seeing the steady increase in shorts across the entire energy sector. THey are in place to keep prices low for the record earnings season.
I think the divy was expected.. a hike would have been a better catalyst to move the stock. Perhaps some bullish commentary at the next ER might help. This stock is trading at pandemic levels.. it should be at least in the mid 80's, IMO.
There seems to be some frustration over the fact that refiner stocks are not keeping up with the increasing price of oil. Oil producers are benefiting from bullish sentiment based on expectations of rising oil demand (based on opening economies) and of OPEC+ ability to control oil production. (OPEC is meeting as I write this.) The sentiment ignores increasing global electrification and the threat of the Covid variant. I don’t know how long this bullish sentiment lasts but I doubt oil gets close to $100. I could be wrong.
Refiners are not sellers of crude oil. They are buyers paying the increasing oil price. They count on gasoline and diesel prices to keep up with oil but these fuels trade as separate markets – with prices based on supply and demand of those fuels. The optimal situation for refiners is high fuel prices, low crude oil prices (thus a strong crack spread) and strong demand for fuel. Low crude prices also discourage EV adoption.
US refiner stocks, on a day-to-day basis, often move in tandem with oil producers because
US fuel demand numbers affect both groups. Also, major refiners are included in all energy funds and indexes. These mostly consist of producer stocks and move with oil.
I apologize to those for which all of this is obvious. Nevertheless, trying to explain or justify moves in energy – including refiners – is mostly a guessing game. Good luck to all. #MPC #PSX
Can someone explain why psx is getting hit so hard? I understand OPEC negotiations are taking place, but regardless of output, isn't psx more based on refinery?
Time for management put company up for SALE & i still think $90. per share from CVX be real! Could bid war with xom take it to $95?? Maybe!
What is the cause of the earnings estimate being lowered? Anyone with ideas?
Oil refinery shutdown signals growing challenges for sector
A key oil refinery for U.S. East Coast consumers is halting operations after escalating environmental scrutiny made it impossible for backers to obtain desperately needed financing.
The owners of the Limetree Bay refinery in the U.S. Virgin Islands announced plans Monday to shut the 200,000-barrel-a-day facility and dismiss more than 250 workers just weeks after a federal crackdown over a series of pollution incidents.
The demise of Limetree Bay is the most dramatic fallout from the Biden administration’s plan to wean the world’s biggest economy off fossil fuels since the January cancellation of the Keystone XL pipeline project. It’s also emblematic of the challenges facing an industry struggling with shrinking profitability, excess production capacity and rising competition from mega-refineries in Asia.
“There’s no reason we won’t see further closures in the U.S.,” said Robert Campbell, head of oil products research at Energy Aspects Ltd. Refiners will find it harder and harder to raise money for equipment upgrades and pollution-control gear, he noted.
Refinery executives told employees on Monday that 271 of them will lose their jobs effective Sept. 19, according to a company statement that cited “severe financial constraints.”
Limetree Bay has attracted the attention of environmental regulators since its backers that include ArcLight Capital Partners, Freepoint Commodities and EIG Global Energy Partners began efforts to restart the idled refinery in September.
Last month, following a slew of emissions incidents that included contamination of drinking water, the Environmental Protection Agency ordered it to halt operations, reversing a Trump administration approval.
Known formerly as Hovensa, the St. Croix plant was previously owned by Hess Corp. and Venezuela’s state-owned Petroleos de Venezuela SA before it was shuttered in 2012. Once a major supplier of gasoline and diesel to the East Coast markets, the facility was mothballed during a previous downturn in demand and increased international competition.
Roughly 2 million barrels of daily refining capacity may be shut next year to avoid further margin erosion, BloombergNEF analyst Sisi Tang said in a report. The transition away from fossil fuels also dims the long-term outlook for refiners, prompting companies such as Valero Energy Corp. to expand into biofuels.
7/5: Well OPEC decided (atleast for today) to leave the quota as is. Therefore, oil price to increase.
Excellent run company and keep in mind the key word "Diversified" .. not just a refiner.
Fuel for Thought: US Refiners, RINs and the RVO
The mandates for blending renewables into US transportation fuels have been a contentious issue for refiners from their inception, when Congress enacted ethanol mandates in 2005, citing national energy security as a reason.
Refining icon Tom O'Malley, the then recently retired CEO of PBF Energy, railed against ethanol blending on PBF's Q1 2013 earnings call, dubbing it the "Food for Fuels Program," a subsidy for farmers at the expense of refiners.
"Let's convert all the food to fuel, that way we can drive and starve to death while we are driving," he said.
But times and circumstances have dramatically changed. The shale revolution turned the US into an oil exporter, neutralizing issues around energy security, which have given way to concerns about climate change and greenhouse emissions. But the issue of renewables remain a bone of contention as refiners chafe at the loss of market share and high price of compliance.
And while the program administering the use of renewables in hydrocarbon-based fuel has also evolved over time under the Environmental Protection Agency's more sophisticated and complex Renewable Fuel Standard, some industry participants think it is time for an overhaul to make the RFS more in tune and responsive to current reality.
The RFS sets blending mandates not just for ethanol, but for advanced biofuels, biomass-based diesel, and cellulosic biofuel, considered a unicorn fuel by some since it has never met its RFS volume requirements and is rarely seen.
Renewable Identification Numbers, or RINs, are the currency of the RFS. If a refiner cannot meet its EPA-assigned annual blend target, they must buy RINs credits on the open market to make up the shortfall to meet their obligation.
While individual refiner RVOs are closely guarded, S&P Global Platts assesses the RVO as a value calculated using daily RINs prices and biofuel mandates for per-gallon compliance costs.
The RFS's RVO by design rises annually based on the assumption that fuel demand will rise.
However, pandemic lockdowns had a deleterious impact on transportation fuel demand in 2020, pushing it far below that of 2019. It also pushed most refiners' earnings into negative territory for much of 2020 and Q1 2021, while laying bare the flaws of the RFS' renewable volume obligation on refiners, trying to meet non-existent demand.
"As fuel demand destruction increased [throughout 2020] ... the 'RIN basket,' or the price of all RINs refiners must obtain for RFS compliance, rose over 500% on the year," PBF wrote in a Feb. 18 letter to the EPA.
"This occurred as refining crack spreads remained weak—and even turned negative at one point," the letter said.
Volatile RINs markets fueled by uncertainty
RINs prices, particularly D6 ethanol RINs and D4 biodiesel RINs, have skyrocketed over the past few quarters as lower gasoline and diesel demand in 2020 led to lower blending and less RIN creation, making less RINs available.
So far in Q2 2021, D6 ethanol RINs are averaging $1.62981/RIN, while D4 Biodiesel RINs are averaging $1.710254/RIN, compared with 2020 annual average values of 43.20 cents/RIN and 64.15/RIN, respectively, Platts assessments show.
And the RVO, which averaged 13.146 cents/gal in Q1 2021, is now averaging 19.485 cents/gal in Q2 2021.
One factor adding to the volatility of RINs prices is the delay by the EPA in setting 2021 blending mandates. This delay was exacerbated by waiting for the US Supreme Court ruling on small refinery exemptions. On April 27, the Supreme Court heard on appeal the small refinery exemption case brought by HollyFrontier after it was denied an exemption by the Tenth District Court.
But news June 16 from the Office of Budget Management that the EPA, which had missed its Nov. 30, 2020, deadline for 2021 mandates, will set preliminary levels in July to be finalized in December sent D6 ethanol RIN prices to three-month lows.
The OMB news jibes with market sentiment that the EPA is not expected to release its 2021 renewable volume obligations until after the Supreme Court decision on the small refinery exemption case is reached, according to a refining source familiar with the situation.
"There's a lot being discussed, and the EPA has no direction," he said. "They are paralyzed by the small refinery case."
"They will wait for the SCOTUS decision on the SRE before they release the biofuel mandate," he added, which could potentially be delivered in late June or early July.
The EPA wants to see "where the pieces land" before they come out with an RFS mandate for 2021, the source said, to ensure it takes into account all stakeholders, including refiners and biofuel producers.
Small refiners sidelined
Despite a slight fall in RINs prices recently, most small refiners...
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