Refiners HF Sinclair, PBF profits tumble as lower fuel prices hit margins

Reuters

Published Aug 03, 2023 06:33AM ET

Updated Aug 03, 2023 10:30AM ET

By Arunima Kumar

(Reuters) -HF Sinclair and PBF Energy (NYSE:PBF) on Thursday joined bigger refiners in reporting a fall in second-quarter profit as fuel prices slipped from last year's peaks that were driven by supply shortages due to the Russia-Ukraine conflict.

Refiners last year posted bumper profits, benefiting from strong pricing after Russia's invasion of Ukraine strained fuel supplies that were already running low due to reopening economies across the world after a long pandemic-led shutdown.

Shares of PBF fell 6.5% to $44.87, and those of HF declined 1% to $51.08 after the companies also reported big drops in their second-quarter margins.

Dallas, Texas-based HF said consolidated refinery gross margin fell 39% to $22.22 per produced barrel, while PBF's gross refining margin, excluding special items, dropped 55% to $13.62 a barrel.

HF's throughput also decreased due to turnarounds at its Navajo, Parco and El Dorado refineries during the quarter.

"With the majority of the planned turnaround work behind us, we believe our diversified portfolio is well positioned to capture the margins available to us for the remainder of the year," HF CEO Tim Go said.

Meanwhile, PBF's quarterly throughput was roughly flat. It expects current-quarter throughput between 925,000 and 985,000 bpd.

"At the midpoint, this is ~6.5% below our previous estimates for 3Q with turnaround work planned for the West Coast in the fall," said RBC Capital Markets analyst TJ Schultz.