Phillips 66

U.S. ethanol blending credit prices plunged Monday to their lowest levels in more than four months after the Environmental Protection Agency extended a September 1 compliance deadline for refiners and ruled on long-pending small refinery exemption requests by the end of August. Conventional ethanol RINs traded as low as $1.75, down $0.34 from Friday and their lowest level since April 15, according to data from Argus Media, after the credits had traded as high as $2.50 on July 7. RIN prices lost substantial value again during Monday's session in response to the EPA's impending small refinery exemption decisions, after falling 5% on Friday. Market participants expect the EPA's rulings to free up a significant number of credits, with refining and ethanol industry analysts estimating that the exemptions could free up 1.2 billion to 1.8 billion RINs that small refiners could use to meet their 2025 compliance obligations, after the EPA had previously indicated it could reallocate 990 million RINs associated with exemptions. Extending the compliance deadline is seen as signaling some form of RIN relief for refiners' 2026 and 2027 obligations as well, University of Illinois agricultural economist Scott Irwin told Reuters.

Phillips 66 shares have gained 17.5% in the past four weeks, extending a rally backed by a sharp improvement in second-quarter results. Second-quarter 2026 adjusted earnings were $9.41 per share, up from $2.38 a year earlier and beating the Zacks Consensus Estimate of $7.68 by 22.5%, while total revenues and other income rose to $52.04 billion from $33.52 billion and beat the consensus mark by 43.9%. Worldwide realized refining margins climbed to $24.08 per barrel from $11.25 a year earlier, crude capacity utilization reached 96%, and refining adjusted pre-tax income increased to $3.09 billion from $392 million. Midstream adjusted EBITDA reached $1.05 billion as natural gas liquids pipeline throughput averaged 943,000 barrels per day and fractionation volumes hit 1.02 million barrels per day. The Zacks Consensus Estimate calls for 2026 earnings of $23.86 per share and 2027 earnings of $21.42, and PSX currently carries a Zacks Rank #3 (Hold).

Phillips 66 is viewed as the most credible potential acquirer of Delek US Holdings, whose stock has surged 141% year to date past Wall Street's $64 consensus target. Delek closed at $71.47 on August 21, 2026, near its 52-week high, and an acquirer would gain four refineries with roughly 302,000 barrels per day of capacity plus a 63% controlling stake in Delek Logistics Partners. Marathon Petroleum and Valero Energy each hold about $8 billion in cash but prefer buybacks or demand stronger strategic fit, while Energy Transfer faces leverage and capex constraints. Three Delek executives sold shares on August 17 and 18, 2026, described as routine pre-scheduled sales, and the stock's run-up has compressed the rational takeover premium.

Phillips 66 reported adjusted second-quarter earnings up almost 300% year on year as refining margins roughly doubled, driven by wartime supply shortages and tighter global refining capacity. The profit surge funded further debt reduction and sizable dividends and buybacks, while the company advanced projects such as the Western Gateway pipeline. Preliminary merger talks with Marathon Petroleum for a potential US$180.00 billion combination fell through amid regulatory and antitrust concerns, leaving investors to reassess Phillips 66's strong operating performance on a standalone basis. The company's narrative projects $136.2 billion revenue and $7.3 billion earnings by 2029, assuming flat yearly revenue and a roughly $3.2 billion earnings increase from $4.1 billion today.

Phillips 66 and Marathon Petroleum Corporation remain attractive investments after their $180 billion merger talks collapsed due to regulatory hurdles. Both companies reported strong second quarter 2026 results, with Phillips 66 posting adjusted earnings of $3.8 billion and Marathon Petroleum generating $5.1 billion in net income. Phillips 66 reduced net debt to $16.5 billion and returned $887 million to shareholders, while Marathon returned over $2.8 billion and holds $6.1 billion in remaining buyback authorization. Hedge fund ownership shifted, with Phillips 66 held by 64 funds and Marathon by 54 funds in Q1 2026. Investors should monitor refining crack spreads, fuel demand, and capital allocation strategies.

U.S. refiners are posting record profits as global fuel shortages deepen, with Marathon Petroleum, Valero Energy, and Phillips 66 among the biggest winners of the second-quarter earnings season. Marathon Petroleum, America's largest refiner, earned $5.14 billion in the second quarter, more than quadruple the $1.2 billion it made a year earlier, while diluted EPS jumped to $17.73 and revenue reached $52.34 billion. Valero Energy posted a record second-quarter profit of $3.7 billion, with adjusted earnings surging from $2.28 to $12.54 per share, and Phillips 66 saw second-quarter adjusted earnings jump nearly 300% year-over-year to $9.41 per share. Shares of Marathon Petroleum have gained 122.2% year-to-date, Valero Energy 113.3%, and Phillips 66 85.3%, far outpacing the S&P 500 Energy sector's 36% gain. Chevron also delivered its best quarter in six years with adjusted earnings of $12 billion, or $6.06 per share, while Bloom Energy's second-quarter revenue surged 167% year-over-year to a record $1.07 billion on demand from AI data centers.

Kinder Morgan has joined Phillips 66 and HF Sinclair in the proposed US$5b Western Gateway Pipeline joint venture and reported second quarter 2026 earnings that exceeded market expectations. The company's share price has climbed 18.44% year to date to US$32.82, with a 7 day share price return of 6.39% after the announcement and earnings beat. The most followed Kinder Morgan narrative points to a fair value of $35.33 compared with the latest close at $32.82, implying the stock is 7.1% undervalued. The surging U.S. LNG export market, with U.S. gas feed to export terminals projected to double by 2030 and Kinder Morgan already transporting about 40% of this feed gas, is likely to significantly increase future earnings. However, Kinder Morgan's high net debt near US$32.3b and the risk of overbuilt regions like the Permian affecting contract renewals could challenge this upbeat narrative.

Phillips 66 shares rose after the company committed to the Western Gateway Pipeline joint venture, a planned US$5 billion fuel transport system, while also reporting strong second quarter earnings and expanding its share buyback program. The stock has returned 30.6% over three months and 93.3% over one year, reflecting momentum from the pipeline decision and results. Acquisitions like EPIC NGL are expected to be immediately accretive, supporting a plan to grow Midstream EBITDA to $4.5 billion by 2027. Simply Wall St's most followed narrative places fair value at $207.53 versus a last close of $224.36, implying the stock is 8.1% overvalued, though its own discounted cash flow model suggests a fair value of $361.13. Risks include refinery turnarounds and higher costs that could challenge the current valuation.

Phillips 66 reported second-quarter adjusted earnings of $3.8 billion, or $9.41 per share, and said it expects to achieve its $17 billion total debt target ahead of schedule. The company ended the quarter with total debt of $20.6 billion and net debt of $16.5 billion, and CFO Kevin Mitchell said net debt could fall to around $13.5 billion to $14 billion as a next target. Operating cash flow excluding working capital was $4.3 billion, and the company returned $887 million to shareholders through dividends and buybacks. Refining results rose on higher market crack spreads, while Midstream, Chemicals, Marketing and Specialties, and Renewable Fuels all posted higher earnings. Management said it expects to increase share repurchases in the second half of the year and remains committed to returning more than 50% of net operating cash flow to shareholders.

Kinder Morgan, Phillips 66, and HF Sinclair have finalized a joint venture and made a final investment decision to build the $5 billion Western Gateway Pipeline System. The 1,300-mile system will move refined petroleum products from central U.S. and Gulf Coast refineries to West Coast and Southwest markets, with Kinder Morgan owning 35.1% of the venture. Kinder Morgan will contribute its existing SFPP East Line and SFPP West Line pipelines valued at $1.5 billion, plus $250 million in cash, while Phillips 66 will build a new 900-mile segment and contribute $2.5 billion, and HF Sinclair will contribute $750 million. The project, backed primarily by 10-year take-or-pay contracts, is expected to be completed in 2029 and will initially have capacity of 230,000 barrels per day. CEO Kim Dang said the investment should earn attractive returns and generate incremental stable cash flows, supporting Kinder Morgan's ability to continue growing its dividend, which has increased for nine straight years and currently yields 3.8%.

All 12 S&P 500 energy companies that reported earnings this week beat Wall Street's EPS estimates, while nine topped revenue expectations and three missed. Occidental Petroleum posted EPS of $2.40, beating by $0.55, and revenue of $8.33 billion, exceeding forecasts by $1.08 billion. ConocoPhillips reported EPS of $3.24, a $0.30 beat, on revenue of $19.52 billion that missed estimates. Devon Energy delivered EPS of $1.57, beating by $0.16, with revenue of $7.42 billion surpassing expectations by $1.49 billion. ONEOK's EPS of $1.53 beat by $0.13 on revenue of $12.05 billion, a $3.10 billion beat, prompting raised full-year 2026 guidance. Phillips 66 posted EPS of $9.41, a $1.91 beat, on revenue of $52.04 billion, exceeding estimates by $8.00 billion. EOG Resources reported EPS of $5.07, beating by $0.10, with revenue of $8.62 billion topping expectations by $821.75 million. The sector's strong cash flows, disciplined spending, and shareholder returns continued to support performance, with the State Street Energy Select Sector SPDR ETF gaining 28.27% year-to-date, outpacing the broader S&P 500's 12.63% return.

Phillips 66 expects soaring refining margins will last through the next quarter and into 2027, as supply disruptions from the war in Iran continue to weigh on fuel markets. Executive VP Brian Mandell said on the company's earnings call that markets are short 7 million barrels per day of refined products from the Middle East and Asia, and another 1.4 million barrels per day from Russia, setting up stronger margins through the third quarter and perhaps the rest of next year. The company reported a four-fold increase in second-quarter earnings to $3.85 billion, or $9.55 per share, with its refining segment's adjusted earnings jumping to $3.09 billion and realized margins more than doubling to $24.08 per barrel. Refining utilization rates edged up to 96% in the second quarter, and the company plans to operate in the mid-90% range in the third quarter. Net debt fell nearly 25% quarter-over-quarter to $16.5 billion, putting Phillips 66 on track to reach its $17 billion debt target by the end of 2026, a year ahead of schedule.

Yuanta Securities estimates that Tipco Asphalt Public Company Limited, or TASCO, has a high chance of resuming crude oil imports from Venezuela, which will lift gross margins and drive normalized profit in 2027 up 23.8% to 1.9 billion baht. This follows PDVSA, Venezuela's state oil company, restarting direct crude sales contracts with former customers. Reports indicate Phillips 66 and Reliance Industries resumed purchases in May 2026, while TASCO and Valero Energy are expected to place orders in the coming months. Venezuelan crude has an asphalt yield as high as about 70%, compared with around 50% from other sources, significantly improving cost and production efficiency. The analyst therefore raised the 2027 normalized profit forecast by 18.9% and set a new target price of 19.40 baht, based on a price-to-earnings ratio of 15.8 times, while maintaining a buy recommendation. A 2026 dividend of 1.00 baht per share is forecast, representing a yield of 6.5%.

Second-quarter 2025 earnings for US refiners stood out on surging refining margins. Valero Energy posted a net profit of 3.7 billion US dollars, a more than fivefold increase. HF Sinclair reported net profit of 892 million US dollars, up nearly four times, while PBF Energy swung to a net profit of 915 million US dollars from a net loss a year earlier. Phillips 66 and Marathon Petroleum are also expected to report strong results. For Thai refiners, although they too benefit from refining margins, each company's performance will differ, depending on refinery configuration, crude oil quality, production efficiency, price risk management, and inventory gains or losses in each period. In addition, refiners must shoulder rising hidden costs, such as crude oil premiums, freight rates, and higher insurance premiums driven by Middle East risk, which could add as much as 3 to 6 baht per litre. They also face risks from oil inventory losses, higher financing costs from increased working capital, pressure from government and social measures, and the need to invest in the clean energy transition under Net Zero targets and ESG standards. Key listed Thai companies with core oil refining operations include Thai Oil Public Company Limited, or TOP, Bangchak Corporation Public Company Limited, or BCP, Star Petroleum Refining Public Company Limited, or SPRC, and IRPC Public Company Limited, or IRPC, while PTT Global Chemical Public Company Limited, or PTTGC, has a refining business as part of its integrated structure.

Phillips 66 announced on July 31, 2026, that its board approved a $10.00 billion increase to its share repurchase authorization, bringing the total buyback capacity to $23.00 billion as the prior program neared its limit. The company had already spent over $10.9 billion repurchasing about 21.7% of its shares under the 2019 plan by the first quarter of 2026, alongside regular dividends of $1.27 per share in 2026. This expanded repurchase capacity underscores management's focus on returning capital to investors while balancing dividends, capital investment, and debt reduction within its energy manufacturing and logistics operations. The move adds financial flexibility but does not alter the near-term catalysts of refinery turnarounds and midstream expansion, nor the risks from margin pressure and the ongoing Los Angeles Refinery exit.

Phillips 66 swung to an adjusted profit in the first quarter of 2026, but a sharp rise in leverage is dividing analyst opinion even as operating metrics improve. The company reported adjusted earnings of $0.49 per share, beating the consensus forecast of a $0.40 loss, driven by a 48% jump in realized refining margins to $10.11 per barrel and a utilization rate that climbed to 95%. However, total debt reached $27.1 billion, pushing the debt-to-capital ratio to 48% from 39% in the prior quarter, partly due to $3 billion in cash collateral outflows tied to hedging derivatives. Management is targeting $17 billion in debt by early 2027, but the balance sheet strain leaves little room for operational setbacks. The stock trades at roughly 11 times forward earnings, a discount to Valero’s 14.01 times and the peer average of 16.5 times, yet nearly on par with Marathon Petroleum’s 11.97 times despite Marathon generating higher per-barrel margins.

Phillips 66 shares have climbed to $205.85, delivering a 19.92% return over the past 30 days and a 65.80% total shareholder return over one year, driven by Iran-related oil market disruptions and record crack spreads that are boosting U.S. refiners. The most-followed narrative fair value estimate stands at $194.11, suggesting the stock is about 6% overvalued, while a separate Simply Wall St discounted cash flow model points to a fair value of $210.93, implying modest undervaluation. Acquisitions such as EPIC NGL are expected to be immediately accretive, supporting the company's plan to grow Midstream EBITDA to $4.5 billion by 2027. Investors are weighing these valuation signals against potential risks from weaker refining or chemicals margins and any setbacks in Midstream projects.

U.S. energy shares rose in premarket trading on Thursday after Houthi attacks on two Saudi oil tankers pushed Brent crude briefly to $100 a barrel, intensifying Middle East tensions and heightening concerns over global oil supply disruptions. Brent crude futures rose as much as 6.3% to $100 per barrel for the first time since May 26, while U.S. West Texas Intermediate crude was up 5.2% at $91.30 per barrel. Shares of Exxon Mobil and Chevron rose 1.6% and 1.7%, respectively, and Diamondback Energy, Devon Energy, ConocoPhillips, and Occidental Petroleum were up between 2% and 2.5%. Refiners Valero Energy, Marathon Petroleum, and Phillips 66 also gained between 2.1% and 2.6%. UBS analyst Giovanni Staunovo said the production recovery process in the Middle East is expected to be slower than the market anticipates, keeping the oil market tight and prices supported.

Global refiners are cutting out commodity traders and buying Venezuelan crude directly from state-run PDVSA, eroding the temporary monopoly held by Vitol and Trafigura. Phillips 66 and India's Reliance Industries have already signed direct supply agreements, with Valero and Thailand's Tipco expected to follow. The shift comes after the U.S. Treasury issued special licenses to Vitol and Trafigura until June 2027, allowing them to move more than 100 million barrels over six months while others were locked out. PDVSA is restoring its pre-2019 model of direct contracts, raising its realized prices by avoiding reseller premiums. Backed by U.S. regulatory clearance, Venezuela's total oil and fuel exports climbed past 1.2 million barrels per day in mid-2026, up from an average of 847,000 bpd in 2025, and are now eyeing 1.37 million bpd by year-end.

U.S. refiner margins shattered records this week as low stockpiles and supply disruptions from escalating U.S.-Iran attacks threaten fuel shortfalls. The 3-2-1 crack spread, a key profitability benchmark, settled at a record $69.66 per barrel on Nymex Thursday. Diesel has been the main driver, with disruptions to Middle Eastern exports and a temporary Russian export ban tightening an already-strained market, while gasoline supplies are also a growing concern as refiners shift yields toward diesel and jet fuel. U.S. diesel inventories are down nearly 11 million barrels and gasoline inventories down more than 42 million barrels from pre-war levels, and both are well below their five-year seasonal averages. National average retail gasoline prices reached $3.99 per gallon on Saturday, up nearly $0.84 from a year ago, and analysts warn that depleted inventories and damaged Middle East refineries will keep prices elevated, benefiting refiners whose shares have surged this year.

Marathon Petroleum, Valero, and HF Sinclair each gained over 80% in 2026, far outpacing the S&P 500's 11% gain, as the WTI 3-2-1 crack spread hit $59 per barrel and nearly tripled since January. The crack spread, which measures the gross margin from turning three barrels of crude into two of gasoline and one of distillate, has widened because gasoline and diesel prices remain elevated due to a global refining capacity shortage, the Iran War, Ukrainian attacks on Russian refineries, and lower fuel exports, even as crude prices pulled back after a U.S.-Iran truce. Phillips 66 also climbed over 54%, benefiting from the same tailwind. Falling crude prices do not automatically hurt refiners and can actually boost profitability if refined products stay expensive, though Reuters noted that today's extraordinary margins could prove temporary as crude markets rebalance.

Phillips 66 CEO Mark Lashier warned that global crude oil supplies will take a long time to normalize due to shipping disruptions in the Strait of Hormuz, with 90 to 100 million barrels of crude still stuck in the region because onshore storage tanks are full. Lashier noted that the company has reduced refining costs by about $1 per barrel and aims to reach $5.50 per barrel, though California operations remain more expensive at around $15 per barrel. He also highlighted improved refinery performance through higher yields of high-value products and increased utilization rates. Wells Fargo analyst Sam Margolin maintained a Buy rating on Phillips 66 with a $201 price target on July 2.

U.S. stocks settled lower on Monday as a sell-off in South Korean chipmakers weighed on technology shares and crude oil prices surged amid renewed U.S.-Iran hostilities. The S&P 500 fell 0.79%, the Dow Jones Industrial Average lost 0.26%, and the Nasdaq 100 dropped 1.88%. South Korea's Kospi Index tumbled more than 8% after SK Hynix and Samsung Electronics plunged over 10% on concerns the artificial intelligence boom has become overextended. WTI crude oil soared more than 9% to a three-and-a-half-week high after the U.S. launched fresh missile attacks against Iran over the weekend, and Iran retaliated with strikes on targets in Jordan, Bahrain, Kuwait, and Qatar while also attacking two vessels near the Strait of Hormuz. President Trump later said the U.S. is reinstating the Iranian blockade and stopping Iranian ships from using the strait, demanding a 20% fee on all cargo for U.S. protection. Fed Governor Christopher Waller added to the pressure by saying the FOMC may need to tighten monetary policy if core inflation remains elevated. Software stocks rallied, with Atlassian up more than 8% and Intuit up over 5%, while energy producers gained as Phillips 66 and Valero Energy rose more than 5%.

This week's dividend activity included increased payouts from PNC Financial and CF Industries as well as declarations from Costco and Phillips 66. PNC Financial raised its dividend by 17.6% to $2.00 per share, while CF Industries boosted its payout by 20% to $0.60 per share. Costco declared a dividend of $1.47 per share, and Phillips 66 declared $0.27 per share. Looking ahead, Abbott Labs and AbbVie will see their ex-dividend dates on July 15, with payouts scheduled for August 17 and August 14, respectively.

Phillips 66's board of directors has declared a quarterly dividend of $1.27 per share on its common stock. The dividend will be paid on September 1, 2026, to shareholders of record as of the close of business on August 18, 2026.

TD Cowen raised its price target on Phillips 66 to $220 from $213 while maintaining a Buy rating, citing constructive refining sector outlook and expected capital structure improvements. Morgan Stanley also lifted its target to $196 from $180 with an Overweight rating, noting refining margins remain elevated. Phillips 66 operates across Midstream, Chemicals, Refining, Renewable Fuels, and Marketing segments.

The global aliphatic hydrocarbon solvents and thinners market is forecasted to surge to USD 6.81 billion by 2032, climbing from USD 5.26 billion in 2026 with a projected CAGR of 4.4%. Growth is propelled by heightened consumption in key sectors such as coatings, adhesives, and industrial maintenance, with the mineral spirits segment estimated to hold the largest share by type and the paints and coatings segment leading by application. Asia Pacific is estimated to hold the largest market share, driven by strong demand from paints and coatings amid massive construction activities in manufacturing powerhouses such as China, India, and Japan. Key players include ExxonMobil Corporation, Shell, Phillips 66, SK Geocentric, and Calumet.

Phillips 66 is moving forward with a 7-megawatt waste heat to power facility at its Mewbourn gas processing complex in Colorado, developed by Kanin Energy, which will convert turbine waste heat into lower-emissions power for on-site use without requiring upfront capital from Phillips 66. The company has also secured Foreign-Trade Zone subzone status for its Billings, Montana operations, a move that can reduce operating expenses through trade and tax efficiencies. These initiatives are part of Phillips 66's broader effort to cut costs and improve refining unit economics, supporting its investment narrative around margin resilience and long-term earnings growth.

West Texas Intermediate oil is trading below $70 per barrel, down from over $100 in May, creating a favorable environment for refiners. Phillips 66 and Par Pacific have surged 37.1% and 86.9% over the past year, respectively. Phillips 66 benefits from lower crude costs and a diversified business spanning midstream and chemicals, which provides resilience against commodity volatility. Par Pacific gains from sourcing crude from multiple origins, including cheaper Canadian heavy oil, giving it a cost advantage in producing high-value products.

Phillips 66 and Halliburton have surged 33.7% and 56.4% over the past year, outperforming the broader oil-energy sector, and may continue their upward trajectory even as crude prices have fallen below $70 per barrel from over $100 in May. Phillips 66, a leading refiner with diversified midstream and chemicals operations, benefits from lower crude costs and stable cash flows that insulate it from commodity volatility. Halliburton, a top oilfield services provider, stands to gain as current oil prices remain above shut-in levels, supporting upstream activity and demand for its completion, production, drilling, and evaluation services. Both large-cap stocks carry a Zacks Rank of 2, or Buy.

Phillips 66 closed at $171.76, a 1.85% increase that outpaced the S&P 500's 0.01% loss. The stock has fallen 3.43% over the past month, performing better than the Oils-Energy sector's 9.23% decline but worse than the S&P 500's 1.4% loss. The company is expected to report earnings on August 5, 2026, with a consensus EPS estimate of $6.12, up 157.14% from the prior-year quarter, and revenue of $36.91 billion, a 10.1% increase. For the full year, estimates call for EPS of $18.22 and revenue of $146.18 billion, representing jumps of 182.92% and 7.04%, respectively. The Zacks Consensus EPS estimate has risen 3.44% over the past month, and the stock carries a Zacks Rank of 2, or Buy. Phillips 66 trades at a forward P/E of 9.26, a premium to its industry average of 8.64, and a PEG ratio of 0.24, below the industry average of 0.35.

Oil prices are currently trading just below $70 per barrel, much lower than the shut-in prices of existing U.S. wells, which are below $50 per barrel according to the Federal Reserve Bank of Dallas. This environment benefits Phillips 66, a leading refiner with a diversified business across midstream and chemicals, as it can purchase crude at lower costs. Nabors Industries, a provider of drilling technology and services, also stands to gain because the current oil prices, which are much lower than the shut-in prices, are likely supporting exploration and production activities, driving demand for its services. On its first-quarter 2026 earnings call, Nabors said it expects rig day rates in the Lower 48 to rise to the mid-$30,000 range through 2027 from the low-$30,000 range.

Kanin Energy announced plans to develop a 7-megawatt waste heat to power facility at the Phillips 66 Mewbourn natural gas processing complex in Platteville, Colorado. The system will capture waste heat from gas compression turbines and convert it into onsite baseload power, lowering long-term power costs and reducing greenhouse gas emissions. Kanin Energy will develop, own, and operate the facility under a turnkey model requiring no upfront capital from Phillips 66. Construction is expected to begin later this year.