(Refiles to correct syntax in headline)
July 31 (Reuters) - Phillips 66 posted a smaller-than-expected loss on Friday as the refiner’s retail marketing business, which buys and resells petroleum products, benefited from a decline in prices following the coronavirus crisis.
The unit buys refined products from others and resells them, pocketing the difference and benefiting from improved margins when prices are down. The unit also sells other specialty products, including lubricants.
Credit Suisse analyst Manav Gupta said the marketing segment’s earnings before interest and taxes of $293 million beat the brokerage’s estimate of $220 million.
Refiners are seeing signs that fuel demand is picking up gradually worldwide as travel restrictions are eased, but a second wave of cases could lead to renewed lockdowns and derail demand recovery.
Rival PBF Energy Inc, which posted a bigger-than-expected loss, said the low point of demand, particularly for gasoline and diesel, appears to have passed with demand rebounding to about 80% of pre-COVID levels.
The company said jet fuel will likely take much longer to recover, and that it will continue to operate at lower volumes till “sustained product demand justifies higher production.”
Phillips 66 reported a loss of 74 cents per share, smaller than the 93 cents analysts had expected, according to IBES data from Refinitiv.
“We believe this will be a trend this quarter and both MPC (Marathon Petroleum Corp) and DK (Delek U.S. Holdings Inc) will put up earnings upside surprises driven by retail businesses,” Gupta said.
Smaller rival Valero, which reported a smaller-than-expected loss on Thursday, said it saw a rapid recovery in demand in the second quarter and forecast current-quarter throughput, the amount of crude processed at its refineries, to rise over 5% sequentially. (Reporting by Shradha Singh and Shariq Khan in Bengaluru; Editing by Shinjini Ganguli)