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Comparing Phillips 66, the WTI 3-2-1 Crack, and SPY

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Jan. 24 2019, Updated 7:32 a.m. ET

Phillips 66’s stock performance

Previously, we reviewed expectations for Phillips 66’s (PSX) refining margin in the fourth quarter. During that quarter, its stock fell, as did the SPDR S&P 500 ETF (SPY). The USGC (US Gulf Coast) WTI 3-2-1 crack, a vital indicator for Phillips 66, contracted.

Since October 1, Phillips 66 has fallen 16.8%, the USGC WTI 3-2-1 crack has narrowed 33.0% to $12.90 per barrel, and SPY has fallen 8.7%. The indicators may have impacted Phillips 66 stock, whereas the company’s better-than-expected earnings announcement in October may have supported the stock.

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Peers’ stock performance

Since October 1, Valero Energy (VLO), Marathon Petroleum (MPC), HollyFrontier (HFC), and PBF Energy (PBF) have fallen 27.5%, 19.8%, 19.5%, and 28.1%, respectively. Next, we’ll forecast Phillips 66’s stock price based on its implied volatility.

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