21 May

Phillips 66: Analyzing the Short Interest

WRITTEN BY Maitali Ramkumar

Short interest in Phillips 66

The short interest in Phillips 66 (PSX) has risen from 1.1% on February 14 to the current level of 1.5%. Usually, everything else being equal, an increase in the short interest means an increase in the bearish sentiment for a stock. During the same period, Phillips 66’s stock price has fallen 11.3%.

Phillips 66: Analyzing the Short Interest

Why the change in bearish sentiment?

The rise in the short interest in Phillips 66 could be in anticipation of weaker first-quarter earnings. Lower refining cracks and narrower oil spreads led to an expectation of lower profits from the company for the first quarter.

Phillips 66 posted its first-quarter earnings, which fell in line with the expectations. The company’s refining earnings fell to -$219 million in the first quarter. Lower refining margins led to subdued earnings. Phillips 66’s realized refining margins fell 22% YoY to $7.2 per barrel in the first quarter. The Central Corridor’s refining margins fell the most in the first quarter. Lower Canadian crude oil spreads impacted the refining margin.

Phillips 66’s adjusted chemical earnings fell 21% YoY to $227 million in the first quarter. The company’s adjusted marketing earnings fell 8% YoY in the first quarter. However, Phillips 66’s midstream earnings rose 13% YoY.

Peers’ short interest

In contrast to the trend in Phillips 66, the short interest in Marathon Petroleum (MPC) and PBF Energy (PBF) has fallen 0.2% and 1.9%, respectively, since February 14. Currently, the short interest in Marathon Petroleum and PBF Energy is 1.1% and 4.2%, respectively. The short interest in HollyFrontier (HFC) has fallen 1.0% since February 14 to the current level of 3.7%.

If we consider the stock price movements since February 14, then Marathon Petroleum, PBF Energy, and HollyFrontier have fallen 18.9%, 12.3%, and 24.7%, respectively.

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