United States Oil Refiners to Post Strong Earnings

Reuters, April 24, 2023

U.S. fuelmakers are expected to post higher first-quarter earnings in coming days on strong fuel exports and margins even as domestic diesel demand slumped during the period.

Refiners have been riding a wave of favorable pricing and demand as pandemic-era closings boosted margins. Alternating periods of higher demand for products have also helped, with jet fuel recently sprinting higher as diesel fell off.

"It's looking like another really strong quarter for U.S. refiners and their balance sheets are in great shape, but in the second quarter things are really starting to come down," said Matthew Blair, refining analyst at Tudor Pickering Holt and Co.

Valero Energy, the second-largest U.S. refiner by capacity, kicks off earnings on Wednesday with per share profit expected to more than triple to $7.23, based on the mean estimate of 17 analysts compiled by Refinitiv, compared to $2.31 per share a year ago.

Top U.S. refiner by volume Marathon Petroleum (MPC.N) is forecast to show a per share profit of $5.71 compared to $1.49 a year ago, while Phillips 66 could deliver a $3.60 per share, compared to $1.32 a year ago, according to Refinitiv. Both are scheduled to report in early May.

Exxon Mobil (XOM.N) this month signaled its refining profits could reach $3.55 billion for the period compared $332 million a year ago, which was hurt by high maintenance costs.

Forecasts of a weaker second quarter reflect declining exports and capacity increases in Asia, the Middle East and U.S. Gulf Coast, analysts said.

The U.S. refining crack spread, a proxy for profit from processing a barrel of oil into fuels, is hovering around $30 per barrel, $10 lower than a year ago, Refinitiv data showed.

The four-week average of U.S. distillate product supplied, a proxy for demand, has remained below the five year average for most of the first quarter, according to the U.S. Energy Information administration.

"Longer term demand concerns continue to weigh on refiners," Jefferies bank analysts wrote in a research note, pointing to projected lower industrial activity in OECD member countries being only partially offset by China.

(Reporting by Laura Sanicola; Editing by David Gregorio)

Click here to read the full article from Reuters.

Copyright 2024 Thomson Reuters. Click for restrictions.

Comments and Discussion

There are no comments yet.

Add a Comment

Please log in or register to participate in comments and discussions.

Inspectioneering Journal

Explore over 20 years of articles written by our team of subject matter experts.

Company Directory

Find relevant products, services, and technologies.

Training Solutions

Improve your skills in key mechanical integrity subjects.

Case Studies

Learn from the experience of others in the industry.


Inspectioneering's index of mechanical integrity topics – built by you.

Industry News

Stay up-to-date with the latest inspection and asset integrity management news.


Read short articles and insights authored by industry experts.

Expert Interviews

Inspectioneering's archive of interviews with industry subject matter experts.

Event Calendar

Find upcoming conferences, training sessions, online events, and more.


Downloadable eBooks, Asset Intelligence Reports, checklists, white papers, and more.

Videos & Webinars

Watch educational and informative videos directly related to your profession.


Commonly used asset integrity management and inspection acronyms.