2Q16 refining earnings
PBF Energy’s (PBF) gross refining margin fell by $2.9 per barrel from 2Q15 to $6.5 per barrel in 2Q16. Operating costs at $4.3 per barrel remained stable in 2Q16 compared to 2Q15. The decline in gross margin resulted in a net refining margin of $2.2 per barrel in 2Q16 compared to $5.1 per barrel in 2Q15. The fall in margins was due to lower crack spreads in 2Q16 compared to 2Q15.
PBF’s throughput rose from 45 million barrels in 2Q15 to 64 million barrels in 2Q16, as it included operations at the Chalmette refinery.
Refining margin of PBF’s peers
PBF Energy (PBF) peer Marathon Petroleum (MPC) noted a fall in the gross refining and marketing margin by $2 per barrel over 2Q15 to $12.8 per barrel in 2Q16. In 2Q16, Valero Energy (VLO) noted a fall in its gross refining margin to $8.9 per barrel compared to $13.7 per barrel in 2Q15. Also, HollyFrontier (HFC) is expected to witness its refining margin fall in 2Q16 compared to 2Q15. If you are looking for broad-based exposure to energy sector stocks, you can consider the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
PBF’s Logistics segment
PBF’s Logistics segment reported a fall in operating income from $24.7 million in 2Q15 to $23.8 million in 2Q16. PBF plans to strengthen PBF Logistics (PBFX) by growing and acquiring new logistics assets. Also, dropdowns will likely provide growth opportunities for PBFX.