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How Bright is the Outlook for Par Pacific's Refining Business?
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Key Takeaways
PARR's July refining index stayed high at $31.34 per barrel after averaging about $33 in the second quarter.
Firm fuel demand and tight global inventories continue to support attractive refining margins for PARR.
PARR may face near-term Hawaii turnaround pressure, but the broader refining backdrop remains supportive.
Par Pacific Holdings Inc. (PARR - Free Report) continued to benefit from a strong refining market at the start of the third quarter. Its refining index, which is a rough measure of how profitable it is to turn crude oil into products like gasoline and diesel, was still very high in July at $31.34 per barrel, slightly below the second-quarter average of about $33.
Demand for fuels remained solid, especially on the mainland, while global fuel inventories stayed relatively tight. In simple terms, there was still healthy demand for refined products and limited excess supply, which helped Par Pacific continue earning attractive margins from its refineries.
PARR appears well-positioned to benefit from still-strong refining margins, firm fuel demand and tight global product inventories. Although the Hawaii turnaround could weigh on third-quarter throughput and margin capture in the near term, the broader refining backdrop remains supportive of continued strong earnings.
Will PSX and VLO Also Gain?
The favorable business environment is also likely to benefit refiners such as Phillips 66 (PSX - Free Report) and Valero Energy (VLO - Free Report) .
On its second-quarter 2026 earnings call, PSX noted that there aren’t enough refineries or products globally right now because much refining capacity is offline and fuel inventories are low. China is also exporting less fuel than usual. This shortage helps keep refining margins, also called crack spreads, high. PSX believes these shortages may take longer to resolve than in 2022, which could keep the energy major’s refining profits strong into the September quarter and potentially 2027.
Valero Energy is unlikely to be an exception. The overall favorable refining business backdrop is also likely to be aiding VLO’s bottom line.
PARR’s Price Performance, Valuation & Estimates
Shares of PARR have gained 103.4% over the past year compared with the industry’s growth of 97.9%.
Image Source: Zacks Investment Research
From a valuation standpoint, PARR trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 3.26X. This is below the broader industry average of 5.65X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for PARR’s 2026 earnings hasn’t seen any revisions over the past seven days.
View the Zacks #1 Rank List
Image: Bigstock
How Bright is the Outlook for Par Pacific's Refining Business?
Key Takeaways
Par Pacific Holdings Inc. (PARR - Free Report) continued to benefit from a strong refining market at the start of the third quarter. Its refining index, which is a rough measure of how profitable it is to turn crude oil into products like gasoline and diesel, was still very high in July at $31.34 per barrel, slightly below the second-quarter average of about $33.
Demand for fuels remained solid, especially on the mainland, while global fuel inventories stayed relatively tight. In simple terms, there was still healthy demand for refined products and limited excess supply, which helped Par Pacific continue earning attractive margins from its refineries.
PARR appears well-positioned to benefit from still-strong refining margins, firm fuel demand and tight global product inventories. Although the Hawaii turnaround could weigh on third-quarter throughput and margin capture in the near term, the broader refining backdrop remains supportive of continued strong earnings.
Will PSX and VLO Also Gain?
The favorable business environment is also likely to benefit refiners such as Phillips 66 (PSX - Free Report) and Valero Energy (VLO - Free Report) .
On its second-quarter 2026 earnings call, PSX noted that there aren’t enough refineries or products globally right now because much refining capacity is offline and fuel inventories are low. China is also exporting less fuel than usual. This shortage helps keep refining margins, also called crack spreads, high. PSX believes these shortages may take longer to resolve than in 2022, which could keep the energy major’s refining profits strong into the September quarter and potentially 2027.
Valero Energy is unlikely to be an exception. The overall favorable refining business backdrop is also likely to be aiding VLO’s bottom line.
PARR’s Price Performance, Valuation & Estimates
Shares of PARR have gained 103.4% over the past year compared with the industry’s growth of 97.9%.
From a valuation standpoint, PARR trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 3.26X. This is below the broader industry average of 5.65X.
The Zacks Consensus Estimate for PARR’s 2026 earnings hasn’t seen any revisions over the past seven days.
Par Pacific currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.