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US Refiners See Margins Surge in August as Diesel Cracks Strengthen, TPH Says

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US refiners saw an improvement in operating indicators in August, led by stronger diesel cracks, wider crude differentials and gains across key refining regions, TPH Energy strategists said in a note on Wednesday.

TPH analysts said among large-cap refiners, Phillips 66 (PSX) posted the biggest month-over-month improvement, while Valero Energy (VLO) retained the strongest quarter-over-quarter gain.

The analysts said that in the small- and mid-cap group, CVR Energy led both measures as stronger Midwest diesel cracks lifted its refining indicator.

Valero's refining indicator climbed to $47.07 a barrel in August from $43.11 in July, with improvements across the Mid-Continent, Gulf Coast and West Coast.

Diesel cracks generally strengthened during the month, while crude differentials widened, particularly for Gulf Coast heavy grades such as Maya and WCS at Houston.

TPH said the move pushed Valero's quarter-to-date refining indicator $15.00 per barrel higher than in Q2, the largest quarterly improvement among the large-cap refiners tracked by the consultancy.

However, Valero's renewable diesel indicator slipped 13 cents per gallon from July, though it remained $1.27 per gallon above the Q2 level.

Marathon Petroleum's (MPC) refining and marketing indicator rose to $48.70 per barrel from $42.14, in line with TPH's estimate.

The improvement reflected stronger cracks across all regions, wider sour crude differentials and a more favorable market structure. Its quarter-to-date indicator was $13.29 per barrel above Q2.

Phillips 66 posted the largest monthly increase among the large-cap refiners, with its indicator jumping $8.10 per barrel to $40.58.

Gains were concentrated in the Gulf Coast and Central Corridor, helped in part by wider crude differentials. Its quarter-to-date indicator was $12.51 per barrel higher than in Q2.

HF Sinclair's (DINO) refining indicator climbed $9.60 per barrel to $43.49, outperforming TPH's estimate, with gains in both regions and particularly great improvement on the West Coast.

The company's lubricants indicator also edged higher to $222 per barrel, remaining $57 per barrel above the Q2 level.

Par Pacific Holdings posted a smaller quarterly improvement, though its monthly indicator rose $8.43 a barrel to $39.77. TPH said that the increase was driven primarily by its two Rockies refineries, bringing the quarter-to-date gain to $2.41 per barrel from the Q2 levels.

The consultancy said that among the smaller refiners, CVR Energy recorded the strongest performance. Its refining indicator jumped $11.41 per barrel to $55.17, in line with TPH's estimate, as stronger Midwest diesel cracks boosted results.

The increase left CVR's quarter-to-date indicator $18.24 per barrel above the Q2 level, the largest quarterly gain across the companies tracked.

Price: $391.48, Change: $+8.48, Percent Change: +2.21%

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