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Phillips 66: Refining Yields in the Fourth Quarter

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Dec. 4 2020, Updated 10:52 a.m. ET

Refining yields impact refiners’ revenues

The refining yield shows various refined products’ volumes. Higher complexity refineries (with more and advanced oil processing units) produce lighter refined products like gasoline. Lighter refined products get higher realizations than heavier products. So, more production of lighter products means higher revenues for refiners.

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Phillips 66’s refining yields

Phillips 66’s (PSX) refining operations yielded 45% gasoline and 39% distillates in the fourth quarter. Gasoline is a lighter product that gets relatively higher realizations than other refined products. Phillips 66’s gasoline production rose 1.6% YoY to 1,050 Mbpd (thousand barrels per day) in the fourth quarter. Phillips 66’s distillate fuel production rose 2.3% YoY to 907 Mbpd in the fourth quarter.

The production of other products increased in the fourth quarter compared to the fourth quarter of 2017. Phillips 66’s Others segment, which also included heavy refined products, accounted for 16% of its total production in the fourth quarter. Phillips 66’s total production rose 2.0% YoY to 2,338 Mbpd in the fourth quarter.

Phillips 66’s gasoline yield could increase as modernization projects in the Refining segment get completed. There could be higher margins and improved earnings from the refining operations.

Peers’ refining yields

Valero Energy (VLO) produced 49% gasoline and 37% distillates in the fourth quarter. Marathon Petroleum’s (MPC) refining operations yielded 50% gasoline and 35% distillates in the fourth quarter. Phillips 66 produced less gasoline compared to Marathon Petroleum and Valero Energy in the fourth quarter.

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