(Reuters) -Refiner HF Sinclair beat Wall Street estimates for third-quarter adjusted profit on Thursday, helped by improvement in refining margins and strength in its midstream segment, sending shares up 1% in premarket trading.
Fuelmakers in the U.S. have benefited from a rebound in refining margins from multiyear lows in 2024, as supply shortages related to geopolitical tensions in Ukraine supported stronger pricing.
The rebound also helped companies such as Valero Energy and Phillips 66 beat Wall Street expectations.
U.S. refinery margins, measured by the 3-2-1 crack spread, in the third quarter rose nearly 29% on average from a year earlier, helped by strong diesel and gasoline margins on the back of robust demand and low inventories.
The company’s adjusted refinery gross margin per barrel was up at $17.50 in the quarter, compared with $9.38 from a year earlier and refinery utilization up at 107.8%, compared with 101.2% a year ago.
Its refining segment reported a quarterly core profit of $661 million, compared with $110 million from a year earlier.
HF Sinclair said on Wednesday it is considering expansion of its pipeline systems across the Rocky Mountain and West Coast to bolster fuel supplies in markets such as California and Nevada.
New pipeline expansions could help ease the strain on West Coast fuel supplies from the planned closures of Phillips 66’s Los Angeles refinery by the end of this year and Valero Energy’s Benicia refinery next year.
Midstream firms that transport natural gas are benefiting from an increase in electricity consumption by homes, businesses, crypto-mining and an AI-led boom in data centers.
HF Sinclair’s midstream segment reported a 2.7% rise in its quarterly adjusted core profit at $114 million, compared from a year earlier.
The company reported adjusted profit of $2.44 per share for the three months ended September 30, compared with analysts’ average estimate of $1.77 per share, according to data compiled by LSEG.
(Reporting by Pooja Menon in Bengaluru; Editing by Leroy Leo)
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