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Petrobras (PBR) Hits Record March S-10 Diesel Despite Coronavirus

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Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) recently announced that it produced a record output of S-10 low sulfur diesel in March, reaching 416 thousand barrels per day (bpd). This represents a 2% rise from the previous record set last October.

Also, for the month of March 2021, Petrobras recorded total diesel sales volume of 791 thousand bpd, indicating a 35% surge from the level achieved in the same month last year. Moreover, Petrobras' refining park hit a utilization factor of 80.2% last month amid three mandatory refinery shutdowns for maintenance, thereby contributing significantly to these results.

The adverse COVID-19 impact on fuel demand is being offset by the inflated sales of low-sulfur diesel, which in turn, echoes the strategic steps taken by the company to strengthen its commerce. This, in turn, also reflects Petrobras’ fruitful efforts to increase the fuel supply with limited sulfur content, thereby replacing the S-500 diesel.

Also, recently, Petrobrasentered into an agreement to sell its Landulpho Alves Refinery (RLAM) and its related logistics assets to Abu Dhabi’s Mubadala Capital for $1.65 billion, which is contingent on regulatory approvals. The company’s sale of eight refineries is currently on track and all the divestments are estimated to be completed by the first quarter of 2022.

Of the eight refineries with 1.15 million barrels per day (bpd) of installed capacity, binding proposals for Petrobras’ three refineries, namely REMAN in Amazonas, LUBNOR in Ceara and SIX in Parana states are still in progress.  

Company Profile

Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. The company’s activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks. Its operations also include refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons apart from other energy-related operations.

Zacks Rank & Key Picks

Petrobras currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the energyspace include Matador Resources Company (MTDR - Free Report) , Diamondback Energy, Inc. (FANG - Free Report) and Devon Energy Corporation (DVN - Free Report) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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