Phillips 66 (PSX -2.9%) shares slump as it reports an emission at its Rodeo refinery in...


Phillips 66 (PSX -2.9%) shares slump as it reports an emission at its Rodeo refinery in California related to an unplanned unit shutdown. It's part of a broad slump in refiners today, picking up pessimism in the sector which has led to sharp recent losses: VLO -4.8% (despite a plug by Jim Cramer), HFC -4.4%, TSO -3.3%, MPC -3.2%, WNR -2.9%, CVI -2.4%, ALJ -2.3%, NTI -2.2%.
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Comments (4)
  • benitus
    , contributor
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    Any idea why is there a general slump among refiners today? It's appears that there're some confusion and yet, all of them are down. Thanks.
    11 Apr 2013, 04:49 PM Reply Like
  • hikerbob
    , contributor
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    Benitus, I don't know. What I do know is that refiner profits and margins are, among other things, sensitive to the difference between the cost of crude oil imports, as measured by Brent, and the price of domestic crude oil, as measured by West Texas Intermediate. See, http://bit.ly/SATgmZ. Because there is not a large regional US difference between gasoline and other refined product prices, refiners who have access to cheaper domestic crude oil prices have higher margins and profits. In short, the greater Brent/WTI differential, the higher the margins/profits for those that can buy WTI or other lower cost domestic crude oil. Recently, the Brent/WTI differential has been declining and is now less than $10/barrel. See, http://bit.ly/SATgmZ. This does not bode well for refiner margins and profits.
    12 Apr 2013, 04:42 AM Reply Like
  • benitus
    , contributor
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    hiker...thanks for the input. I thought that the spread was above $26 last week or the week before. I'm shocked to know that it had dropped to $9.80 on Apr 8th and with the recent drop in the price of Brent, it might drop even further. I think the problem has more to do with the rising cost of domestic crude, due to increased demand. Looks like we may have to hold out until the summer before demand for refined products increase and improve profits on higher throughput volume. I had expected that Brent would increase, with NKorea tensions, but this time round, the rumour-mongers have gone to sleep.
    12 Apr 2013, 01:23 PM Reply Like
  • jolacious
    , contributor
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    Come on all you energy think tanks, what is wrong with the refiners especially TSO?
    11 Apr 2013, 07:18 PM Reply Like
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