U.S. Refiners Take a Beating in Second Quarter

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Researched by Industrial Info Resources (Sugar Land, Texas)--Second-quarter 2016 was not kind to the pocketbooks of many U.S. refiners. On Friday, three companies reported substantial drops in their refining income for the just-ended quarter amid thinner margins and operational issues. Nonetheless, progress was noted for several ongoing projects.

Phillips 66 (NYSE: PSX) (Houston, Texas) reported its second-quarter earnings were $496 million, down 51% from $1.01 billion the same period in 2015. Nonetheless, progress continues on improvement projects, at the Wood River Refinery in Illinois, the Billings Refinery in Montana and the Bayway Refinery in Linden, New Jersey, Phillips 66 said. Industrial Info is tracking $3.46 billion in active Phillips 66 projects.

LyondellBasell Industries (NYSE:LYB) (Rotterdam, The Netherlands) reported a second-quarter operating loss of $53 million by its refining segment, compared with $119 million in operating income for the same period a year earlier. Second-quarter refinery throughput was down by 72,000 barrels per day from the prior year period due to a fire in April and subsequent repairs at the company's Houston refinery. The blaze heavily damaged the coker unit. The refinery had returned to normal operations by mid-July. The company estimated it lost $140 million in revenue as a result of the fire. Lyondell reported progress on a number of projects, but these were mainly in other business segments including Olefins & Polyolefins and Intermediates and Derivatives. Industrial Info is tracking $3.59 billion in active LyondellBasell projects.

Alon USA Energy, Inc. (NYSE: ALJ) (Dallas, Texas) reported a net loss of $20.2 million for the quarter ended June 30, compared with $36.4 million in net income in second-quarter 2015.

Alon Chief Executive Officer Paul Eisman said the refining environment "remained challenging as crack spreads were pressured by high product inventories." The average benchmark crack spread was down about $6.60 per barrel compared with the same quarter last year. He added that profits were also hurt by unplanned downtime at the company's Big Spring Refinery in Texas as a result of a power outage. Industrial Info is tracking $344 million in active Alon USA projects.

Not all the news was bad for U.S. refiners, comparatively speaking. Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) said U.S. downstream earnings were $412 million, flat with the second quarter of 2015. However, global downstream earnings $825 million, down $681 million from the second quarter of 2015. Weaker refining margins decreased earnings by $850 million, it said.

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