P66: Fuel Demand Response Too Small To Balance Market


   
Daniel Rodriguez Huerta
DTN Refined Fuels Market Reporter

   CALGARY, CANADA (DTN) - Phillips 66 said Wednesday (10/28) refining margins 
were expected to be strong through most of 2027 as fuel demand was projected to 
stay resilient on the back of inadequate supply.   

   With 7 million bbl worth of refining capacity remaining offline in Russia, 
Asia and the Middle East, concurrent with wars in Iran and Ukraine, the 
response to demand "isn't enough to balance the market", Brian Mandell, 
executive vice president for marketing at Phillips 66, told analysts on the 
company's earnings call.

   Phillips 66 expects more unplanned outages worldwide given how hard refiners 
have been pushed, Mandell said.

   The company is also watching whether China, which has not been willing in 
recent years to increase exports, will do so now, he added.

   Phillips 66 executives also told the call that:

The company sees heavy crude as "a race to the bottom for both Canadian and 
Venezuelan and even high sulfur fuel oil."Phillips 66 favors Canadian crude 
over WTI, and that each $1 widening of the WCS-WTI differential was worth $140 
million to the company.


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