Phillips 66

Valero Energy (VLO) has witnessed a rise in its short interest since mid-February 2017.

VLO’s mean price target of $72 per share implies around a 10% gain from its current level.

Refining stocks’ implied volatilities have witnessed falls in 1Q17. Marathon Petroleum’s (MPC) implied volatility fell 7% to 27.9% from January 2 to March 31, 2017.

Phillips 66’s (PSX) 90-day beta stood at 1.2 on March 16, 2017, below its peer average of 2.1.

Fifteen out of the 19 analysts covering Phillips 66 (PSX) rated it as a “hold” in March 2017. Another four analysts rated PSX as a “buy” or a “strong buy.”

Marathon Petroleum’s implied volatility currently stands at 28%—the highest level among peers Valero, Tesoro, and Phillips 66.

On March 2, 2017, Marathon Petroleum’s 90-day beta stood at 2.0—the highest among peers Valero, Tesoro, and Phillips 66.

After its 4Q16 results, four of 19 analysts assigned “buy” or “strong buy” recommendations to Phillip’s 66 stock, while 15 assigned “holds.”

After MPC proposed the dropdown plan, MPC’s forward price-to-earnings (or PE) and EV-to-EBITDA stood at 15.7x and 8x, respectively.

Marathon Petroleum’s (MPC) implied volatility currently stands at 37%, the highest among its peers.

Phillips 66’s adjusted EBITDA from its Marketing segment fell 22% from 3Q15 to $429 million in 3Q16 due to weaker marketing margins and lower volumes.

After Elliott Management’s recommendations, Marathon Petroleum’s forward EV-to-EBITDA multiple stood at 23.1x.

Refining margins are dependent on input crude oil cost, product slate, and prices of refined products and are indicators of overall profitability.

The key factors influencing refining profitability include refining capacity, complexity, and utilization rates.

The Gulf Coast, a key US refining region, accounted for 9.6 MMbpd of total refining capacity, which represents 52% of the total refining strength in the US.

Of the total consumption of 20.2 MMbpd, in October 2016, gasoline accounts for around 9.1 MMbpd. Distillate fuel oil accounts for 4.1 MMbpd of the total.

Refiners such as PSX, MPC, VLO, and TSO are now focusing on diversifying their earnings models to shield themselves from the volatile refining environment.

Since the end of June, Marathon Petroleum’s (MPC) stock has risen by 28%. MPC has crossed over its 50-day and its 200-day moving averages during this period.

Since mid-February 2016, Phillips 66 (PSX) has witnessed an 18% fall in its short interest.

Marathon Petroleum’s (MPC) refining segment’s operating income plunged to -$62 million in 1Q16 due to a fall in its gross refining and marketing margin.

Amid stock price volatility, Valero rose 20% from February 8–March 28, 2016, and crossed over its 50-day and 200-day moving averages.

The correlation value of Phillips 66 (PSX) and crude oil prices shows that the price of PSX stock moves in line with WTI prices to a certain extent.

Phillips 66 (PSX) has segments in refining, midstream, chemicals, and marketing. In 1Q16, the refining segment contributed $86 million, or 24%, to its adjusted net income.

Gasoline prices in the West Coast region were at $2.45 per gallon on January 25, 2016—around $0.60 per gallon higher than the average US gasoline prices.

Crude exports account for more than 85% of Saudi Arabia’s revenue. The economy still isn’t diversified. Saudi Arabia is already experiencing high fiscal deficit.

The benchmark US Gulf Coast 3:2:1 crack spread fell ~12.50% last week. It hit ~$13.28 per barrel on Friday, November 13, 2015.

According to the EIA, since the Torrance outage, imported supplies of gasoline have been arriving in Southern California from all over the world.

Shell Midstream Partners (SHLX) has a 42% ownership in the Zydeco pipeline, and Shell Pipeline Company, or SPLC, owns the remaining 57% interest.

MPLX LP (MPLX) is a master limited partnership, or MLP. It was formed by independent refiner Marathon Petroleum Corporation (MPC).

Unit price for DCP Midstream decreased 24% in the past year. The fall is particularly sharp since the end of October when its unit price crashed 32%.

Location-advantaged refiners like Valero Energy (VLO), Phillips 66 (PSX), and Marathon Petroleum (MPC), with refineries along the Gulf Coast, can export refined products.

The Clifton Ridge crude system is made up of three pipelines and two terminals. It supports the Lake Charles refinery in Westlake, Louisiana.

Phillips 66 Partners (PSXP) is a master limited partnership formed by Phillips 66 (PSX). PSXP operations are integral to PSX refineries.