- Phillips 66 (NYSE:PSX) CEO Greg Garland predicts refiners will process less crude in H2 of this year as margins shrink due to a gasoline glut.
- "We've got a lot of inventory stacked up," but demand for refined products remains strong, Garland said on today earnings conference call.
- PSX says its refineries will function at a mid-90% capacity in the current quarter rather than 100% utilization in Q2, in which its reported profit was sliced in half as earnings from its refining business plunged 75% Y/Y.
- PSX's Q2 refining margin was $7.13/bbl, well below $8.22/bbl estimated by Wells Fargo analysts, and smaller rival Alon USA Energy (NYSE:ALJ) reported that its Q2 refinery operating margin fell by more than half to $3.96/bbl.
- Throughout the week, Valero Energy (NYSE:VLO), Marathon Petroleum (NYSE:MPC) and BP all reported a decline in refining margins for the period.