Phillips 66: Finally Positioned For A Refining Up-Cycle (With A Venezuela Kicker)

2026-01-27 10:40:40 ET

For many years, Phillips 66's ( PSX ) Refining Segment has underperformed relative to peers Valero Energy ( VLO ) and Marathon Petroleum ( MPC ). That fact is abundantly clear from the total returns comparison of the three largest independent refiners in the United States (see graphic below). However, it would appear that PSX's management team's promise to improve its poor refining margins is finally coming to fruition. That, combined with what is likely to be PSX's increased access to significantly discounted Venezuelan heavy crude, may well result in a relatively strong Refining Segment up-cycle for the company this year. Today, I'll take a fresh look at a company that I have long maintained a HOLD rating on (since July of 2023) to see if PSX just might be ready for an upgrade....

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