U.S. refiners entered the third quarter with sharply wider fuel margins, lifting earnings expectations ahead of results from four oil companies, while federal forecasts point to easing spreads ahead.
ExxonMobil and Chevron are scheduled to report Friday, Oct. 30, followed by Marathon Petroleum on Nov. 3 and ConocoPhillips on Nov. 5. Their results will show how the quarter’s margin surge interacted with other parts of their businesses.
The U.S. Energy Information Administration (EIA) said refinery utilization in the United States averaged 95% during the quarter. The volume of crude processed was the largest for a third quarter since 2019, despite capacity then being 4% greater. Gasoline spreads averaged more than twice the year-earlier level, while distillate and jet fuel spreads came close to three times as wide; gasoline’s spread narrowed in the quarter’s second half.
ExxonMobil’s Oct. 16 filing illustrates the uneven effect. It estimated that higher margins would lift Energy Products earnings by $4.5 billion relative to the second quarter, while lower liquids prices would trim Upstream earnings by $1.3 billion. Separately, estimated timing effects were negative by $0.7 billion in Upstream and $1.9 billion in Energy Products. The company said the figures cover selected factors and are not a forecast of total third-quarter earnings.
In its Oct. 6 outlook, the EIA projected gasoline crack spreads would retreat but stay above seasonal averages into early 2027. It expected distillate prices to ease as crude prices fell and inventories recovered. The agency also forecast that distillate crack spreads would decline but remain high compared with historical averages.
Tight fuel supplies and disruptions to refining in Russia, China and the Middle East helped widen spreads during the quarter, the EIA said. Wider margins can help refiners, while higher wholesale fuel prices can also add costs for consumers.
The effect varies across the four companies. ExxonMobil and Chevron have production and refining operations; ConocoPhillips focuses on exploration and production, while Marathon Petroleum has downstream and midstream businesses and a large refining system. The EIA’s next Short-Term Energy Outlook is scheduled for Tuesday, Nov. 10.
