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Is Phillips 66's Refining Segment Poised for Continued Strength?
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Key Takeaways
Phillips 66 may benefit as softer WTI prices reduce crude input costs for its refining segment.
EIA sees rising global inventories, projecting 2026 WTI at $53.42 per barrel vs. $65.40 in 2025.
PSX shares rose 22% in a year; 2026 earnings estimates have moved higher in the past week.
West Texas Intermediate (WTI) oil price is currently hovering around $63 per barrel, according to data from Oilprice.com, which is significantly lower than a year ago. Phillips 66 (PSX - Free Report) is likely to gain from the softer crude pricing environment.
This is because Phillips 66 is a leading refining company. Hence, it is now able to purchase oil at a lower cost, enabling the production of end products. Crude prices are likely to remain soft in the coming days, as the U.S. Energy Information Administration (“EIA”) expects global oil inventories to continue increasing.
EIA projects the spot average West Texas Intermediate price for 2026 at $53.42 per barrel, lower than $65.40 per barrel in 2025. Thus, Phillips 66, which generates significant margin from its refining activities, is likely to benefit from lower oil prices.
VLO & PARR Also Poised to Gain
Valero Energy Corporation (VLO - Free Report) and Par Pacific Holdings Inc. (PARR - Free Report) , two other well-known refiners, are also likely to benefit from the ongoing relatively low oil prices.
Valero Energy, with 15 refineries, has a throughput capacity of 3.2 million barrels per day. VLO mentioned that its refining activities are capable of generating sufficient cash flows to support shareholders’ returns along with growth.
Par Pacific is mainly a refining company with the capacity to process 219,000 barrels of oil daily. Notably, having exposure to Canadian heavy oil, which is cheaper than lighter crude, Par Pacific is likely to have been enjoying a cost advantage.
PSX’s Price Performance, Valuation & Estimates
Shares of PSX have gained 22% over the past year compared with the 25.2% rise of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, PSX trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 13.03X. This is above the broader industry average of 5.06X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for PSX’s 2026 earnings has seen upward revisions over the past seven days.
View the Zacks #1 Rank List
Image: Bigstock
Is Phillips 66's Refining Segment Poised for Continued Strength?
Key Takeaways
West Texas Intermediate (WTI) oil price is currently hovering around $63 per barrel, according to data from Oilprice.com, which is significantly lower than a year ago. Phillips 66 (PSX - Free Report) is likely to gain from the softer crude pricing environment.
This is because Phillips 66 is a leading refining company. Hence, it is now able to purchase oil at a lower cost, enabling the production of end products. Crude prices are likely to remain soft in the coming days, as the U.S. Energy Information Administration (“EIA”) expects global oil inventories to continue increasing.
EIA projects the spot average West Texas Intermediate price for 2026 at $53.42 per barrel, lower than $65.40 per barrel in 2025. Thus, Phillips 66, which generates significant margin from its refining activities, is likely to benefit from lower oil prices.
VLO & PARR Also Poised to Gain
Valero Energy Corporation (VLO - Free Report) and Par Pacific Holdings Inc. (PARR - Free Report) , two other well-known refiners, are also likely to benefit from the ongoing relatively low oil prices.
Valero Energy, with 15 refineries, has a throughput capacity of 3.2 million barrels per day. VLO mentioned that its refining activities are capable of generating sufficient cash flows to support shareholders’ returns along with growth.
Par Pacific is mainly a refining company with the capacity to process 219,000 barrels of oil daily. Notably, having exposure to Canadian heavy oil, which is cheaper than lighter crude, Par Pacific is likely to have been enjoying a cost advantage.
PSX’s Price Performance, Valuation & Estimates
Shares of PSX have gained 22% over the past year compared with the 25.2% rise of the composite stocks belonging to the industry.
From a valuation standpoint, PSX trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 13.03X. This is above the broader industry average of 5.06X.
The Zacks Consensus Estimate for PSX’s 2026 earnings has seen upward revisions over the past seven days.
PSX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.