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Phillips 66 Stock Is Down 20% in Q4: USGC WTI 3-2-1 Crack Plunges


Nov. 20 2020, Updated 12:47 p.m. ET

Phillips 66 stock has fallen

Since the beginning of the fourth quarter, Phillips 66 (PSX) stock has fallen 20.3%. Also, the SPDR S&P 500 ETF (SPY), the broader market indicator, has fallen 8.0% in the quarter so far.

In the current quarter, Phillips 66 stock has fallen likely due to a weaker refining environment. The USGC WTI 3-2-1 crack, the benchmark crack, has fallen since October 1. The crack has contracted 28.5% over October 1 to its current level of $13.8 per barrel. On a quarterly average basis, the crack has fallen 13.5% YoY to $15.5 per barrel in the fourth quarter so far.

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The USGC (US Gulf Coast) is a major refining area for Phillips 66. The company processed 35% of its total oil and feedstock throughput in the region in the first nine months of 2018. The fall in the USGC WTI 3-2-1 crack could indicate a weaker refining margin and earnings for Phillips 66 in its fourth-quarter results.

However, Phillips 66 posted better-than-expected third-quarter earnings, which positively impacted its stock. For more information, read Phillips 66’s Third-Quarter Earnings Beat the Estimates.

Peers’ performances

Valero Energy (VLO), Marathon Petroleum (MPC), and PBF Energy (PBF) have fallen 32.0%, 22.7%, and 24.9%, respectively, since October 1. HollyFrontier (HFC) and Delek US Holdings (DK) have fallen 13.5% and 10.7%, respectively.

In the next article, we’ll review how Phillips 66’s moving averages are trending in the current quarter.


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