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Exxon Mobil Corporation (XOM - Free Report) has reportedly reduced production from the 502,500 barrels per day Baton Rouge refinery, located in Louisiana, following declining demand and reduced staffing at the site. The refinery, which was shut following a fire on Feb 12, restored production capacity on Mar 9. Notably, production from the Baton Rouge unit declined to 440,000 barrels per day on Saturday.
ExxonMobil’s inventories have increased and storage tanks are filling quickly as the market is witnessing lower demand due to social distancing, an ongoing method of preventing the spread of coronavirus. Demand for motor fuel is expected to decline until normalcy returns. It is to be noted that other refineries in the country are also following suit.
Moreover, the company is said to have opted for minimum staffing for the same reasons. The number of contract workers in the facility was reduced by 1,800 last Friday, per Reuters. Notably, the number of contract workers at the site is usually 2,000 and is increased when needed.
Importantly, the company's downstream operations recorded $3,687 million year-over-year lower profit in 2019 due to maintenance activities and contraction in the industry's fuel margins. Its refinery throughput averaged 4.1 MMBbls/d in the last reported quarter, lower than the year-earlier level of 4.3 MMBbls/d. With the present market conditions, the situation is not expected to improve anytime soon. However, President Trump, who doesn’t like shutdowns, expects the federal guidance on social distancing to ease in a few weeks. This will likely lead to inventory drawdown as the demand for fuels will rise.
Another company, Phillips 66 (PSX - Free Report) has reduced rates by 15-20% at its Bayway refinery in New Jersey, per S&P Global Platts.
Price Performance
ExxonMobil has lost 55% year to date compared with 54.4% decline of the industry it belongs to.
New Fortress’ bottom line for 2020 is expected to rise more than 100% year over year.
Superior Energy’s bottom line for first-quarter 2020 is expected to rise 66.8% year over year.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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ExxonMobil Curbs Baton Rouge Output Amid Weak Market Demand
Exxon Mobil Corporation (XOM - Free Report) has reportedly reduced production from the 502,500 barrels per day Baton Rouge refinery, located in Louisiana, following declining demand and reduced staffing at the site. The refinery, which was shut following a fire on Feb 12, restored production capacity on Mar 9. Notably, production from the Baton Rouge unit declined to 440,000 barrels per day on Saturday.
ExxonMobil’s inventories have increased and storage tanks are filling quickly as the market is witnessing lower demand due to social distancing, an ongoing method of preventing the spread of coronavirus. Demand for motor fuel is expected to decline until normalcy returns. It is to be noted that other refineries in the country are also following suit.
Moreover, the company is said to have opted for minimum staffing for the same reasons. The number of contract workers in the facility was reduced by 1,800 last Friday, per Reuters. Notably, the number of contract workers at the site is usually 2,000 and is increased when needed.
Importantly, the company's downstream operations recorded $3,687 million year-over-year lower profit in 2019 due to maintenance activities and contraction in the industry's fuel margins. Its refinery throughput averaged 4.1 MMBbls/d in the last reported quarter, lower than the year-earlier level of 4.3 MMBbls/d. With the present market conditions, the situation is not expected to improve anytime soon. However, President Trump, who doesn’t like shutdowns, expects the federal guidance on social distancing to ease in a few weeks. This will likely lead to inventory drawdown as the demand for fuels will rise.
Another company, Phillips 66 (PSX - Free Report) has reduced rates by 15-20% at its Bayway refinery in New Jersey, per S&P Global Platts.
Price Performance
ExxonMobil has lost 55% year to date compared with 54.4% decline of the industry it belongs to.
Zacks Rank and Stocks to Consider
Currently, ExxonMobil has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the energy sector are New Fortress Energy LLC (NFE - Free Report) and Superior Energy Services, Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
New Fortress’ bottom line for 2020 is expected to rise more than 100% year over year.
Superior Energy’s bottom line for first-quarter 2020 is expected to rise 66.8% year over year.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>