Phillips 66 Stock, the USGC WTI 3-2-1 Crack, and Other Key Numbers to Watch



Phillips 66’s stock performance

Since April 3, 2017, Phillips 66 (PSX) stock has risen 4.6%, while the SPDR S&P 500 ETF (SPY) has risen 4.7%. The US Gulf Coast WTI (West Texas Intermediate) 3-2-1 crack has widened steeply by 8.2% since April 3.

The US Gulf Coast is a significant refining area for Phillips 66 (PSX) and accounted for ~34% of the company’s crude oil throughput in 2016. Any rise in the benchmark crack in the area points to a possible rise in PSX’s refining margin since April 3.

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Phillips 66 stock rises since April 3

On April 28, 2017, Phillips 66 announced its 1Q17 earnings, which exceeded the earnings estimate. The refining margin indicators of the main American refining companies like Marathon Petroleum (MPC) and Tesoro (TSO) have pointed to a better refining environment in 2Q17 over 2Q16. Valero Energy (VLO) has seen a rise in its refining margin indicators in two out of the four areas where it operates.

Meanwhile, the EIA (US Energy Information Administration) reported a fall in gasoline and distillate inventories for the week ending July 14, 2017, compared with the week ending March 31, 2017. During that week, the gasoline inventory fell 3% and the distillate inventory 1%.

Since April 3, Phillips 66 stock rose likely due to an increase in refining margin indicators, better 1Q17 earnings, and the fall in gasoline and distillate inventory levels.

Peer stock performances

Since April 3, 2017, MPC, TSO, and VLO stocks rose 9%, 20%, and 2%, respectively. Delek US Holdings (DK) rose 10%, but HollyFrontier (HFC) and PBF Energy (PBF) fell 4% and 1%, respectively, during the same period.

In the next part, we’ll discuss how Phillips 66’s moving averages have trended ahead of its 2Q17 earnings release.


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