Marathon Petroleum posts smaller-than-expected loss as refining margins improve
U.S. refiner Marathon Petroleum Corp reported a smaller-than-expected first quarter loss on Tuesday helped by a jump in refining margin and COVID-19 vaccine rollouts, which drove a rebound in fuel demand.
The mass public vaccinations and easing travel restrictions over the last few months have helped fuel demand tick up from the record lows hit last year, lifting the outlook for refiners.
Marathon, which generated positive adjusted core earnings in its refining and marketing business for the first time since the pandemic began, saw its refining and marketing margins grow over 66% to $10.16 per barrel from the previous quarter.
Rivals Phillips 66 and Valero Energy also saw their refining margins surge sequentially in the first quarter.
"We are beginning to see increases in global mobility and demand for transportation fuels", Chief Executive Officer Michael Hennigan said.
However, Hennigan added that the industry continued to struggle with effects of the pandemic in the reported quarter.
The company's crude capacity utilization stood at 83% while total throughput or the amount of crude it processed in the quarter was 2.6 million barrels per day (bpd), up from 2.5 million bpd.
Marathon sees throughput of 2.68 million bpd in the second quarter.
The company also said its board had approved the conversion of the Martinez refinery in California to a renewable diesel plant, and had made a final investment decision.
Martinez, once complete, will be one of the largest renewables facilities in the country.
Excluding items, Findlay, Ohio-based Marathon reported a loss of 20 cents per share, in the quarter ended March 31, while the Street was expecting a loss of 71 cents per share, according to Refinitiv IBES.
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