How Andeavor’s Refining Margin Performed in 3Q17
Andeavor’s refining margin in 3Q17
Andeavor (ANDV) saw an expansion in its gross refining margin by $6.0 per barrel YoY (or year-over-year) to $15.1 per barrel in 3Q17. Its operating costs fell by $0.1 per barrel YoY to $5.0 per barrel in 3Q17. The rise in gross margin plus a fall in operating cost led to an increase in net refining margin.
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ANDV’s net refining margin expanded by $6.1 per barrel YoY to $10.1 per barrel in 3Q17. Andeavor’s EBITDA (earnings before interest, tax, depreciation, and amortization) from its refining segment rose from $208 million in 3Q16 to $940 million in 3Q17.
ANDV’s refining margin rose across its operating zones in the Pacific Northwest, California, and mid-continent. Also, in 3Q17, Andeavor’s refinery throughput rose from 874 Mbpd (thousand barrels per day) in 3Q16 to 1,141 Mbpd in 3Q17, reflecting the impact of the Western Refining integration. the increased refinery throughput also led to higher yields of refined products.
Andeavor’s refining margins
ANDV’s peers have also noted a year-over-year surge in their refining margin in the quarter. Valero Energy (VLO) noted a rise in its refining margin by $2.2 per barrel YoY to $10.9 per barrel in 3Q17. Plus, Phillips 66’s (PSX) refining margin rose by $3.3 per barrel or 45% YoY to $10.5 per barrel in 3Q17. Also, Marathon Petroleum’s (MPC) refining margin expanded by $3.5 per barrel YoY to $14.1 per barrel in 3Q17.
Move on to the next part for a look at Andeavor’s stock performance on its earnings release day.