U.S. refiner Phillips 66 on July 31 reported a quarterly loss compared to a year-ago profit, as coronavirus-led restrictions on businesses and travel destroyed fuel demand and hurt margins.
Fuel demand has plunged as countries around the world limit travel to stem the spread of the coronavirus. This led to a plunge in crude prices, which touched historic lows in April.
Refining margins for the fourth largest U.S. refiner slumped 77% to $2.60 per barrel in the second quarter and the company posted a loss of $878 million in the refining segment, its biggest, compared with a $983 million profit a year earlier.
“Our second-quarter results reflect the disruption in refined product demand from COVID-19 and weak margins across our businesses,” said CEO Greg Garland in a statement.
Net loss stood at $141 million, or 0.33 cents per share, in the quarter ended June 30, compared with a profit of $1.42 billion or $3.12 per share, a year earlier.
Excluding items, Phillips 66 reported a loss of 74 cents per share. Analysts on average had expected a loss of 93 cents per share, according to IBES data from Refinitiv.
Smaller rival PBF Energy reported second-quarter adjusted net loss of $384.8 million, or $3.19, compared to an adjusted net income of $101.1 million, or $0.83 per share, a year earlier.
Leasing hot spots, improved drilling metrics and more reveal some silver lining in the cloud hanging over Midcontinent producers.
The running rate of frac activity in the Permian has shifted from 15 to 20 wells per week in May and June, to 40 to 45 wells per week in the last three weeks. Last week, week 29, activity was particularly strong with 63 started frac operations based on our preliminary estimates. This level of activity has not been seen in the Permian since early April this year.
Compelling returns at $50 WTI portend bright supply picture.