Gasoline prices give Phillips 66 record earnings

Phillips 66 said Friday a shortage of gasoline drove prices to record highs and boosted its bottom line in the second quarter.

The Houston-based refining giant reported net income of $3.2 billion compared with a loss of $296 million during the same period last year.

Revenues increased 77 percent to $49.3 billion from $27.9 billion last year.

“Our earnings reflect the strong market environment during the second quarter driven by a tight global product supply and demand balance,” said Mark Lashier, the company’s new president and CEO.

Lashier moved into the company’s top job this month after longtime CEO Greg Garland stepped down. Garland will continue to serve as executive chairman until 2024, when he plans to retire.

The company used the lucrative quarter to pay $1.5 billion of debt and return value to shareholders by increasing dividends and buying back shares.

Looking ahead, the company said it expects strong earnings to continue amid a shortage of refining capacity. Phillips 66 produces more diesel than the average refiner, executives said, which will benefit it going forward as global diesel shortages continue. While gasoline inventories have begun to stabilize, diesel inventories are still about 20 percent below normal.

“We’re distillate-heavy in our system,” said Brian Mandell, executive vice president for marketing and commercial. “I think that’s going to be a good thing going forward.”

Looking to the company’s future in refining during the energy transition, Lashier said refining is here to stay. “But we’ve got to make sure that we’ve got the right refining assets, to deliver

what the market needs and the right locations.”

There may be opportunities where the company could capitalize more on demand for petrochemicals by repurposing refining assets for chemical production, he said.

Lyondell declines

LyondellBasell said Friday earnings fell during the second quarter as one of its chemical crackers came offline and as demand for chemicals softened in Europe and China.

The Houston-based chemical giant said second-quarter earnings fell 20 percent to $1.64 billion from $2.06 billion during the same period last year. Revenues jumped 28 percent to $14.8 billion from $11.6 billion last year.

Demand for Lyondell’s products, used in packaging and other products, remained strong in North America during the quarter while slowing in Europe and remaining weak in China amid that country’s strict COVID measures, the company said.

The global chip shortage continued to hamper vehicle production and, consequently, the company’s polymer business.

The company also took a $69 million charge as it exited its Australian polypropylene business.

Cash flow was strong during the quarter despite these challenges and the company’s capital allocation was disciplined, said new CEO Peter Vanacker.

“After my first two months as LyondellBasell CEO, I am convinced that our team has the passion and dedication required to grow these capabilities,” he said. “Our aim is to build upon our strong position, our scale and our reach to establish LyondellBasell as a leader in serving the world’s growing needs for circular and sustainable materials while reducing our carbon footprint.”