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Phillips 66 (PSX) has an average rating of overweight and mean price target of $197.88, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)
(Updates with index/price moves, macroeconomic data, and political news from the first paragraph.)US equity indexes fell while volatility jumped with crude oil and government bond yields after President Donald Trump warned of more strikes on Iran after saying a peace deal signed in June "is over"The Dow Jones Industrial Average dropped 1.2% to 52,294.8, with the Nasdaq Composite down 0.2% to 25,760.5, and the S&P 500 lower by 0.5% to 7,469.1 after midday Wednesday.Energy was the standout gainer, with Valero Energy (VLO), Occidental Petroleum (OXY), and Phillips 66 (PSX) leading the S&P 500. Chevron (CVX) was the Dow's top gainer. On Nasdaq, the top spot went to Baker Hughes (BKR).The CBOE Volatility Index jumped 6% to 17 after Trump said, per a Bloomberg report, the US would probably launch further strikes on Iran and could resume a blockade on the country's ports.American forces launched strikes against more than 80 targets in Iran, including air defense systems, command-and-control networks, coastal radar installations and anti-ship missile capabilities, in response to recent attacks on commercial shipping in the Strait of Hormuz, according to a Deutsche Bank note on Wednesday. The strikes were accompanied by the US Treasury's decision to revoke a waiver that had allowed new Iranian oil sales, it said."We hit them very hard last night," Trump said Wednesday on the sidelines of a summit of the North Atlantic Treaty Organization leaders in Ankara, Turkey. "Probably hit them hard again tonight."The front-month global benchmark North Sea Brent soared 7% to $79.37 a barrel, and the US West Texas Intermediate surged 6.9% to $75.29 a barrel.After the burial ceremony of Iran's Supreme Leader Ayatollah Ali Khamenei - killed by an Israeli strike at the outset of the conflict - ends on July 9, both warring sides could adopt an even harder stance, driving a further uptick in geopolitical risk premiums, according to a note from Rystad Energy."Even if no sustained physical disruption materializes, uncertainty around vessel safety, insurance costs, potential delays, and the risk of further retaliation is likely to keep volatility elevated in the near term," the Rystad note said.US Treasury yields rose, reflecting market concern that higher crude oil prices, driven by a supply shock, will make it harder for the Federal Reserve to fight inflation. The two-year yield jumped 5.8 basis points to 4.22%, and the 10-year climbed 6.2 basis points to 4.59%.Inflation concerns also sent gold futures down 2.7% to $4,045.6 and silver futures lower by 5.5% to $57.98.In economic news, the minutes from the Fed's policy meeting on June 16-17 are due at 2 pm ET. Investors will parse the views on the direction of interest rates at a time when the market is pricing in hikes. The probability of a 25-basis-point increase in rates is the highest among all other policy outcomes in September, October, and December, the CME FedWatch tool showed Wednesday.Meanwhile, in company news, Apple (AAPL) said Wednesday that Broadcom (AVGO) will produce chips for use in the iPhone maker's products in a deal likely worth more than $30 billion.
(Updates with index/price moves and political news from the first paragraph.)US equity indexes slumped while volatility surged with crude oil and government bond yields after President Donald Trump warned of more strikes on Iran after saying a peace deal signed in June "is over"The Dow Jones Industrial Average dropped 1.5% to 52,107.8, with the Nasdaq Composite down 1% to 25,572.5, and the S&P 500 lower by 1% to 7,434.1 after midday Wednesday.Energy was the standout gainer, with Valero Energy (VLO), Occidental Petroleum (OXY), and Phillips 66 (PSX) leading the S&P 500. Chevron (CVX) was the Dow's top gainer. On Nasdaq, the top spot went to Baker Hughes (BKR).The CBOE Volatility Index jumped 13% to 18.18 after Trump said, per a Bloomberg report, the US would probably launch further strikes on Iran and could resume a blockade on the country's ports."We hit them very hard last night," Trump said Wednesday on the sidelines of a summit of the North Atlantic Treaty Organization leaders in Ankara, Turkey. "Probably hit them hard again tonight."The front-month global benchmark North Sea Brent soared 7% to $79.37 a barrel, and the US West Texas Intermediate surged 6.9% to $75.29 a barrel.US Treasury yields rose, with the two-year yield jumping 5.8 basis points to $4.22% and the 10-year climbing 6.2 basis points to 4.59%.
Phillips 66 (PSX) has an average rating of overweight and mean price target of $196.53, according to analysts polled by FactSet.Price: $186.73, Change: $+7.89, Percent Change: +4.41%
TPH Energy Research expects US independent refiners to deliver stronger-than-expected Q3 earnings as gasoline and diesel margins remain robust, it said in a Tuesday note.TPH raised its average Q3 earnings per share estimate for the sector to $5.83 from $4.97, above the consensus forecast of $5.22 per share.TPH still expects earnings to remain below its Q2 estimate of $6.18 and the Street's $5.74.TPH said refining margins have started the third quarter strongly, supported by an unusual seasonal increase in US gasoline margins.TPH said its US gasoline margin indicator increased to $35 per barrel in Q3 from $28 per barrel in Q2, after adjusting for Renewable Volume Obligation costs and measuring against Brent crude.US gasoline inventories have fallen to five-year lows and stand 6% below the five-year average, while gasoline yields have remained about 3 percentage points below normal over the past two weeks as refiners favored diesel production, the brokerage said.Diesel margins also improved, with TPH's US futures indicator increasing to $49/bbl in Q3 from $48/bbl in Q2 despite the US-Iran peace agreement.Low inventories, Russian refinery outages and a steeper global cost curve continued supporting diesel markets.TPH said crude differentials have narrowed against Brent for several grades, including WTI-Cushing, Syncrude, Western Canadian Select at Hardisty, Western Canadian Select at Houston and Alaska North Slope, creating a modest headwind for refiners.Company-specific indicators also strengthened early in the quarter, with Valero Energy (VLO) up $7.86/bbl from the prior quarter, Phillips 66 (PSX) up $5.71/bbl and Marathon Petroleum (MPC) up $4.08/bbl, according to TPH.The firm said lower crude backwardation, wider octane spreads and cheaper tanker rates should improve capture rates. Backwardation indicates strong near-term demand or constrained spot supply, with futures prices trading below spot prices.However, weaker jet fuel margins relative to diesel, flat crude prices and a roughly $2/bbl increase in Renewable Volume Obligation costs will offset some of those gains.TPH expects Midwest ethanol margins to improve by about 3 cents per gallon from the Q2 on stronger co-product returns, while retail operations recover. Renewable diesel and polyethylene margins are expected to weaken.Analysts forecast the largest earnings upside versus consensus for Valero Energy, HF Sinclair (DINO) and Par Pacific Holdings (PARR), while maintaining estimates below consensus for PBF Energy (PBF) and CVR Energy (CVI).TPH expects refiners to increase shareholder distributions in Q3 after limiting returns in Q2 because of market volatility.The firm forecasts an average total capital return yield of 9% in Q3, up from 5% in Q2, led by Marathon Petroleum, Valero Energy, Par Pacific Holdings, HF Sinclair and Delek US Holdings (DK).
Effective closure of the Strait of Hormuz resulted in forced shut-ins of about 11 million barrels per day of production at the peak of the conflict, forcing major importers to redraw supply chains, Wood Mackenzie said in note on a Thursday.The shut-ins and force majeure reshaped global crude and fuel markets, the research firm said, citing satellite-based production monitor estimated. Iraq's output dropped from 4.5 mmbbl/d to 820,000 b/d, while Kuwait lost more than 70% of production.The two countries were the worst hit by the closure of the crucial waterways for the lack of any alternate route to export oil and gas, according to multiple reports.WoodMac's satellite data showed producers first drained storage before output declined. Iran's Kharg Island had about nine days of usable storage on May 1, while Kuwait and Iraq continued loading cargoes before inventories climbed, Wood Mackenzie said.Western Canada quickly filled part of the supply gap as the Trans Mountain Expansion pipeline moved a record 832,000 b/d in April at 93.5% utilization. Westridge terminal loaded 500,000 b/d, with 87% heading to Asia-Pacific.South Korea committed to import 33 million barrels of Canadian crude in May under the Canada-Korea Free Trade Agreement, sharply higher than about 4.5 mmbbls during all of 2025, the note said.Wood Mackenzie expects Canadian oil sands production to reach 3.61 mmbbl/d in 2026 and 3.82 mmbbl/d in 2027. Planned pipeline expansions could add 90,000 b/d in 2027, 150,000 b/d in 2028 and 250,000 b/d in 2029, according to the note.California entered the disruption with refinery closures already removing about 167,000 b/d of gasoline production. State-wide output totaled 682,000 b/d against demand of 857,000 b/d, creating a 175,000-barrel deficit, Wood Mackenzie said.Regional demand from Las Vegas and Reno in Nevada, and Phoenix and Tucson in Arizona lifted California's effective gasoline shortfall to about 329,000 b/d. Higher imports kept supplies flowing as freight from Asia climbed to about $14 per barrel.Three pipeline projects, backed by HF Sinclair (DINO), ONEOK (OKE), Phillips 66 (PSX), and Kinder Morgan (KMI) are competing to reduce California's fuel transport costs, but Wood Mackenzie said each must compete with shipping costs that could ease toward $5 per barrel after the Strait of Hormuz reopens.California consumes 857,000 b/d of gasoline, while Japan uses 720,000 b/d despite having 123 million people and 78.7 million registered vehicles. Both markets now compete for supplies from South Korea, China, India and Washington State, the note said.Europe entered the crisis with about 1.8 mmbbl/d of refinery maintenance already offline. Refineries increased utilization and maximized jet fuel output, but inventories still lagged seasonal norms, Wood Mackenzie said.Wood Mackenzie said weaker Indian gas oil exports, down 42%, alongside Russian refinery outages near 1.8 million b/d, could complicate Europe's winter diesel and jet fuel stock rebuild if disruptions persist beyond August.Asia-Pacific crude imports dropped 23% from pre-conflict levels in April. China's Middle East arrivals fell 77%, Japan's imports declined 76%, Korean refinery utilization dropped from 94% to 72%, while China's and India's gas oil exports fell 73% and 42%, respectively.Japan holds about 200 days of strategic petroleum reserve coverage, while India's commercial and government reserves cover roughly 74 days.Australia also pursued regional energy supply agreements with Singapore, Malaysia and Indonesia, Wood Mackenzie said.The US extended its Jones Act waiver through Aug. 16, allowing nearly 4 mmbbls of refined products to reach California. Meanwhile, Venezuela resumed shipping 550,000 b/d to Houston and Pascagoula, while Cushing inventories fell to 21-week lows.Wood Mackenzie said production cuts, inventory movements and freight costs revealed supply tightness before prices reflected the full impact. The report said physical market data consistently moved ahead of headline announcements across regions.
US refining indicators declined across the major refiners in June as weaker gasoline and diesel margins and narrower crude differentials weighed on profitability, although second-quarter performance remained well above the prior quarter, TPH Energy Research analyst Matthew Blair said in a Thursday note.Among the large-cap refiners, Phillips 66 (PSX) posted the greatest quarterly improvement. Its refining indicator slipped to $26.23 per barrel in June from $29.45 in May, but still finished the second quarter up $17.22/bbl from the first quarter. The company benefited from a sharp decline in crude prices late in the month, which supported its Central Corridor operations, while Gulf Coast margins were aided by a lag in refined product pricing. West Coast performance also exceeded expectations.Valero Energy's (VLO) refining indicator fell to $27.58/bbl in June from $33.70 in May as refining economics weakened across all regions, particularly on the West Coast. Despite the monthly decline, the indicator increased by $12.23/bbl quarter over quarter. The company also saw stronger economics for ethanol and renewable diesel during the quarter, supported by lower corn and feedstock costs and stronger renewable fuel credits.Marathon Petroleum's (MPC) refining and marketing indicator dropped to $27.50/bbl in June from $35.88 in May, with the sharpest deterioration in the Mid-Continent region, followed by the West Coast and Gulf Coast. Wider sweet crude differentials and improved market structure partially offset the weakness.Even so, Marathon's indicator finished the second quarter up $14.21/bbl from the first quarter.Overall, June marked a pullback from May's stronger refining environment, but second-quarter indicators remained significantly higher than first-quarter levels across the sector.Price: $177.09, Change: $+2.59, Percent Change: +1.48%
TPH Energy's US retail fuel margin indicator fell 5 cents per gallon over the quarter to 39 cents/gal in Q2 2026, the weakest level in four years, the firm said in a Wednesday note.The indicator recovered to 47 cents/gal in June from 29 cents/gal in May as crude prices eased. However, the quarterly average remained lower because pump prices failed to keep pace with higher crude costs and refining margins, TPH said.Retail gasoline prices increased $1.04/gal over the quarter, while crude costs rose 49 cents/gal and refining margins expanded 69 cents/gal, pressuring overall retail margins, the firm said.Regional trends diverged during the quarter, with TPH's PADD 4 and PADD 5 indicators rising 13 cents/gal and 9 cents/gal, respectively. However, PADD 3 margins fell 6 cents/gal, while PADD 1 and PADD 2 declined 12 cents/gal and 13 cents/gal, the firm said.TPH said Par Pacific Holdings (PARR) has the greatest exposure to retail margin trends in its coverage because of its PADD 5 operations, including fuel stations in Hawaii and Washington, where stronger regional margins could provide support.The firm added that retail margin trends can also influence wholesale operations at refiners, including Phillips 66 (PSX) and HF Sinclair (DINO).Price: $57.47, Change: $+1.39, Percent Change: +2.48%
US refinery capacity fell in 2025 as the permanent closure of two major plants outweighed marginal efficiency gains across the industry, Energy Information Administration strategists said in a note on Monday.EIA analysts said operable atmospheric distillation capacity totaled 18.2 million barrels per calendar day as of Jan. 1. The figure represents a decline of more than 250,000 b/cd, or about 1%, compared with the same period a year earlier, the analysts said.The contraction leaves the US with 130 operable refineries, two fewer than in 2025.The EIA said the decline was driven by the shutdown of two refineries in 2025, including a 263,776-b/d facility in Houston operated by LyondellBasell (LYB) and a 138,700-b/d refinery in Los Angeles owned by Phillips 66 (PSX).Combined, the two closures removed about 400,000 b/d of capacity from the market.However, the agency said incremental capacity expansions and process improvements at existing refineries partially offset the reduction. The EIA identified 130 operable refineries in the US as of Jan. 1, down from 132 a year earlier.The closure of the Phillips 66 Los Angeles facility represented a 5% reduction in refining capacity on the US West Coast, within the Petroleum Administration for Defense District 5.The EIA said that while Valero Energy's (VLO) 145,000-b/d Benicia refinery in California remained operational as of Jan. 1, the facility has since ceased refining operations and was removed from the agency's monthly capacity estimates beginning in March 2026.The closure of the LyondellBasell refinery, by contrast, represented a smaller proportional impact on the US Gulf Coast refining system, accounting for about 3% of capacity in PADD 3, where refining output exceeds regional fuel demand.Overall Gulf Coast refining capacity declined by less than 2% in 2025 after accounting for capacity additions elsewhere in the region, the EIA said.The agency said that the three largest US refiners, Marathon Petroleum (MPC), Valero Energy and Exxon Mobil (XOM), each reported calendar-day capacity increases of less than 1% compared with 2025, reflecting what it described as small-scale operational improvements rather than major expansion projects.Phillips 66 recorded an overall decline in capacity following the closure of its Los Angeles facility.Meanwhile, Chevron (CVX) overtook PBF Energy (PBF) to become the fifth-largest US refiner after posting modest capacity gains.Motiva Enterprises' Port Arthur refinery in Texas retained its position as the largest US refinery by calendar-day capacity at 656,000 b/d, while Marathon Petroleum's Galveston Bay refinery remained the country's largest on a stream-day basis, with a capacity of 678,000 barrels per stream day.Price: $177.06, Change: $+5.41, Percent Change: +3.15%
Phillips 66 (PSX) has an average rating of overweight and mean price target of $196.53, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)
US refining margins have softened heading into the end of the second quarter, pressured by falling gasoline and diesel cracks following progress on a peace deal between the US and Iran, TPH Energy strategists said in a note on Tuesday.TPH analysts said company-specific refining indicators are trading down by $5 to $11 per barrel month-to-date in June, reflecting a broader cooling in energy markets.Matthew Blair, analyst at TPH Energy, said that while the geopolitical developments have weighed on product cracks, the impact across the sector has been uneven.Par Pacific Holdings (PARR) has demonstrated the most resilience among the group, with its refining indicator down $4.94 per barrel month-to-date.TPH said that the Singapore market, a key benchmark, has declined slightly and remains well above its five-year average, while falling crude prices have provided a tailwind for asphalt indicators.The bank said that large-cap refiners show a more mixed picture. Phillips 66 (PSX) is down $7.36/bbl month-on-month but is seen benefiting from potential derivative gains linked to falling crude prices.Valero Energy (VLO) has declined by $7.50/bbl, with strength in Gulf Coast diesel partially offsetting the narrowing of crude differentials.HF Sinclair (DINO) is down $8.03/bbl amid weakness in West Coast and Rockies cracks, though improved Southwest markets partly cushion the impact.Meanwhile, Marathon Petroleum (MPC) shows the steepest monthly decline at $10.85/bbl, driven by softness in Midcontinent refining margins.However, despite the monthly weakness, TPH still expects strong quarter-to-date performance across the sector.Phillips 66 leads gains at $15.84/bbl, followed by Par Pacific at $15.03/bbl, Marathon Petroleum at $13.39/bbl, Valero Energy at $11.77/bbl, and HF Sinclair at $11.13/bbl.Price: $50.94, Change: $-0.11, Percent Change: -0.22%
Energy stocks slightly rose pre-bell Tuesday, with the State Street Energy Select Sector SPDR ETF (XLE) marginally higher.The United States Oil Fund (USO) was down 1.2% and the United States Natural Gas Fund (UNG) was 1.5% lower.Front-month US West Texas Intermediate crude oil was 0.2% lower at $73.68 per barrel at the New York Mercantile Exchange. Global benchmark North Sea Brent crude oil lost 0.5% to $77.54 per barrel, and natural gas futures were down 1.3% at $3.21 per 1 million British Thermal Units.Phillips 66 (PSX) has partnered with Kanin Energy on a 7-megawatt waste heat-to-power project at its Mewbourn natural gas processing complex in Platteville, Colorado, Kanin Energy said. Phillips 66 stock was 0.1% higher premarket.Baker Hughes (BKR) has secured a lifecycle and digital services contract to support turbomachinery operations at ANOH Gas Processing's plant in Nigeria, the oilfield services firm said. Baker Hughes shares were down 0.4% pre-bell.Dorian LPG (LPG) shares were marginally higher after the company said it has signed an agreement to build one Very Large Gas Carrier, or VLGC, and reached separate memoranda of understanding to sell three VLGCs.
Energy stocks were edging higher pre-bell Tuesday, with the State Street Energy Select Sector SPDR ETF (XLE) advancing by 0.3%.The United States Oil Fund (USO) was down 0.9% and the United States Natural Gas Fund (UNG) was 1.4% lower.Front-month US West Texas Intermediate crude oil was 0.4% lower at $73.58 per barrel at the New York Mercantile Exchange. Global benchmark North Sea Brent crude oil lost 0.5% to $77.55 per barrel, and natural gas futures were down 1.1% at $3.22 per 1 million British Thermal Units.Phillips 66 (PSX) has entered a partnership with Kanin Energy on a 7-megawatt waste heat-to-power project at its Mewbourn natural gas processing complex in Platteville, Colorado, Kanin Energy said. Phillips 66 stock was 0.4% higher premarket.
Phillips 66 (PSX) has partnered with Kanin Energy on a 7-megawatt waste heat-to-power project at its Mewbourn natural gas processing complex in Platteville, Colorado, Kanin Energy said Tuesday.The project will capture waste heat from gas compression turbines and convert it into onsite baseload power, improving reliability while reducing emissions and energy costs, the company said.Under the agreement, Kanin Energy will develop, own and operate the facility, delivering a turnkey solution to Phillips 66 with no upfront capital investment.The project is expected to begin construction later this year and lower long-term power costs and reduce greenhouse gas emissions, it added.
US Gulf Coast heavy crude markets are showing signs of divergence as widening discounts for Mexico's Maya blend clash with tightening supplies of Western Canadian Select, TPH Energy strategists said in a note on Monday.Matthew Blair, TPH Energy analyst, said that the market for Maya crude has weakened, with state-owned Pemex widening its discretionary "K factor" price adjustment to a $ 9.20-per-barrel discount for July, steeper than the $8.15 set in June and $4.35 in May.TPH analysts forecast that the move will push Maya-Brent differentials toward a $9.71/bbl discount at the start of Q3, a notable shift from the $7.58 average seen in Q2.The broader heavy crude landscape has been volatile in 2026. TPH said differentials widened in Q1 as additional barrels from Venezuela entered the market, but narrowed in Q2 as regional supplies tightened due to reduced Middle Eastern sour crude shipments.Simultaneously, WCS at Houston has seen its discount to Brent narrow significantly to $7.52 in June, down from $15.12 recorded in May.Market participants attribute this tightness in Canadian heavy crude to supply-side constraints at the source. TPH said unfavorable wet weather in Canada has hindered oil sands operations, compounded by an unplanned outage at Cenovus Energy's (CVE) Foster Creek and Christina Lake assets.The bank said the shifting dynamics in heavy crude pricing carry significant implications for Gulf Coast refiners, specifically Valero Energy (VLO), PBF Energy (PBF), Phillips 66 (PSX), and Marathon Petroleum (MPC).Price: $25.68, Change: $+0.52, Percent Change: +2.05%
US crude inventories dropped by 8.2 million barrels as refinery utilization climbed to 96.7%, reinforcing concerns over tightening fuel supplies, UBS said in a Wednesday note.The Department of Energy reported an 8.2 million-barrel crude draw, exceeding consensus expectations for a 4.6 million-barrel decline and aligning with the American Petroleum Institute estimate of an 8.33 million-barrel draw, UBS said.Gasoline inventories fell by 0.90 million barrels, compared with forecasts for a 1 million-barrel decline. Diesel inventories increased by 0.95 million barrels, versus expectations for a 500,000-barrel draw, according to UBS.Refiners increased utilization rates by 1.4 percentage points over the week to 96.7%. UBS said operators rarely sustain such levels for long, yet fuel inventories continue to tighten despite elevated processing rates.US fuel inventories continue to trail historical levels, with diesel stocks running 12.8% below the five-year average and 5.8% below year-ago levels. Gasoline inventories also remain tight, standing 6.3% below the five-year average and 6.9% lower than a year earlier, according to UBS.Inventory shortages persist across key regions. Diesel stocks in PADD 1 sit 21.6% below the five-year average, while PADD 5 inventories remain 16.7% below historical levels. Gasoline inventories also trail their five-year averages, with deficits ranging from 3.0% in PADD 1 to 10.3% in PADD 3, UBS said.Margins remain well above mid-cycle levels, supporting refinery profitability. In Q2 2026, Mid-Continent cracks averaged $28.58 per barrel versus $13.40/bbl in Q1 2026 and $14.63/bbl a year earlier, while West Coast cracks increased to $41.80/bbl from $24.65/bbl and $25.28/bbl, respectively, UBS added.Strong margin conditions also extended to other regions. North Atlantic cracks averaged $27.64/bbl in Q2 2026, up from $17.41/bbl in the previous quarter and $13.76/bbl a year earlier, while Gulf Coast cracks rose to $30.64/bbl from $18.36/bbl and $12.76/bbl, respectively.Driven by a growing project pipeline, Plains All American Pipeline (PAA) increased its 2026 growth capital spending forecast to $400 million to $450 million net to the partnership from roughly $350 million previously. The company still expects maintenance spending to remain around $185 million.Plains has moved forward with several high-return projects across its Permian long-haul, Permian gathering and Canadian gathering systems as stronger customer interest and improving oil market fundamentals support additional investment, UBS said.After touring Archer-Daniels-Midland's (ADM) Decatur facility, UBS highlighted strong agricultural services results and continued demand for soybean meal in domestic and export markets. Management also views organic expansion opportunities as more attractive than bolt-on acquisitions at present.Improving margins across refining, chemicals and renewable diesel operations could drive stronger earnings and cash flow for Phillips 66 (PSX) through 2026. The company could also accelerate debt reduction as profitability improves, UBS said.Price: $21.34, Change: $-0.24, Percent Change: -1.11%
Phillips 66 (PSX) will likely see a solid year-on-year improvement in earnings this year compared with 2025, despite a weak Q1, which was hit by one-time items, UBS said in a note Monday.Phillips 66 will benefit from margin tailwinds in three of its key businesses: Refining, where margins are "well above mid-cycle levels," Chemicals, where "margins are recovering from historic lows toward mid-cycle," and Renewable Diesel, where margins are expected to go from "below break-even to mid-cycle levels," the note said.The three businesses will likely lead to an increase in the company's year on year free cash flow generation, which will allow it to de-lever at an "accelerated pace," UBS said.The investment firm said it sees a "clear pathway to stronger earnings power and balance sheet improvement" this year.UBS has a buy rating on Phillips 66 and a $212 price target.Price: $172.98, Change: $-6.47, Percent Change: -3.61%
Phillips 66 (PSX) has an average rating of overweight and mean price target of $193.56, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)
Phillips 66 (PSX) has an average rating of overweight and mean price target of $192.67, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)
TPH raised its average second-quarter 2026 earnings estimate for refiners to $6.38 per share from $5.67, exceeding the $5.40 consensus forecast and sharply above Q1 earnings of $0.59 per share, the firm said Thursday.TPH said supply disruptions tied to the US-Iran conflict continue to support refining fundamentals and improve earnings expectations across the sector.The International Energy Agency expects global refinery runs to fall to 78.7 million barrels per day in the second quarter from 83.6 million b/d in Q1 and 82.9 million b/d a year earlier, TPH said.TPH said shipping disruptions in the Strait of Hormuz and refinery damage linked to the conflict are reducing global fuel supplies.US gasoline cracks increased by about $20 per barrel over the quarter to $25/bbl, compared with a five-year average of $20/bbl, the firm said.US diesel cracks climbed by roughly $21/bbl to $48/bbl, more than double the five-year average of $22/bbl, TPH said.The West Coast, Southwest and Rocky Mountain regions posted the strongest margin gains relative to historical averages, while the Mid-Continent and Midwest regions lagged, according to the firm.US refiners increased operating rates to address supply shortages, pushing utilization to 91% in the second quarter from a five-year average of 89%, TPH said.Higher operating rates helped gasoline exports reach 880,000 b/d and distillate exports rise to 1.56 million b/d, above five-year averages of 828,000 b/d and 1.19 million b/d, respectively, the firm said.TPH said tighter availability of Middle Eastern medium-sour crude has narrowed crude differentials, although Western Canadian Select prices at Hardisty and Houston remain under pressure from constrained Canadian pipeline capacity.The firm added that stronger backwardation is creating a $ 5/bbl-over-the-quarter headwind for inland US crude barrels, while elevated tanker costs are weighing on coastal markets.TPH expects lower crude prices, wider West Coast jet fuel premiums, reduced downtime and a $4/bbl increase in octane spreads to support second-quarter capture rates.However, the firm said rising Renewable Volume Obligation costs approaching $4/bbl, tighter crude differentials, weaker butane blending demand and the $5/bbl WTI structure impact remain key challenges.TPH forecast group capture rates of 73% in the second quarter, compared with 72% in the first quarter.The firm said renewable diesel indicators improved by $1.39 per gallon, Midwest ethanol margins increased by $0.33/gal, polyethylene chain margins rose by $0.40 per pound and $0.32/lb, while UAN and ammonia fertilizer prices advanced 33% and 27%, respectively.TPH said potential Small Refinery Exemption proceeds could equal 23% of market capitalization for Delek US Holdings (DK), 7% for Par Pacific Holdings (PARR), and 4% each for HF Sinclair (DINO) and CVR Energy (CVI), assuming partial waivers for all applications.TPH said its second-quarter earnings forecasts exceed consensus estimates for Par Pacific Holdings, HF Sinclair, Phillips 66 (PSX) and Valero Energy (VLO), while its estimate for CVR Energy remains below consensus.Price: $47.19, Change: $+0.01, Percent Change: +0.02%
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