Phillips 66 estimates Q1 mark-to-market commodity price impact of $900M

The company states: “As disclosed in the company’s U.S. Securities and Exchange Commission filings, the company routinely carries a net short position in crude oil, refined petroleum products, natural gas liquids and renewables feedstocks-related derivative contracts. The company’s practice is to utilize these short derivative positions as economic hedges to manage price risk for certain of its physical positions associated with its assets. As a result of the sharp increase in commodity prices, the company’s first quarter financial results were impacted by approximately $900 million in pre-tax mark-to-market losses. However, the associated increase in current market value of the underlying physical inventory is not reflected in book value. The net short position in crude and products related derivative contracts was approximately 50 million barrels as of March 31, 2026. Refining segment results had unfavorable impacts of approximately $300 million pre-tax from the standard two-week lag in Gulf Coast clean products pricing; Midstream segment results were negatively impacted by producer downtime associated with Winter Storm Fern, as well as accelerated depreciation associated with a Permian Basin gas plant; Chemicals segment Global O&P utilization was impacted by reduced operations at CPChem’s Middle East joint ventures; Marketing & Specialties segment margins were adversely impacted by sharply rising spot prices. The sharp increase in commodity prices during the first quarter resulted in a net outflow of approximately $3 billion of cash collateral on derivative positions. To manage these impacts, the company drew on its committed and uncommitted lines of credit, issued and fully drew a new $2.25 billion 364-day term loan, and upsized its accounts receivables securitization facility from $1.25 billion to $1.75 billion. The company is well-positioned to manage further commodity price volatility through ample liquidity and cash generated from operations. As of March 31, 2026, the company had approximately $6 billion of liquidity, reflecting $5 billion of cash and cash equivalents and total committed capacity available under credit facilities of $1 billion. Total debt was approximately $27 billion and net debt was $22 billion at March 31, 2026. The company remains committed to a total debt target of $17 billion by end of 2027.”