Shares of refiners fall on Chevron's 3Q outlook
NEW YORK -- Shares of several oil refining companies fell Wednesday after Chevron Corp. said its third-quarter results will be substantially lower than its second-quarter earnings.
The San Ramon, Calif., oil giant said in an interim update issued Tuesday that oil production fell in the first two months of the third quarter. It also received a lower price for the oil it sold.
Chevron said results from refining and marketing operations dropped after a fire damaged its refinery in Richmond, Calif., and Hurricane Isaac disrupted production at a refinery in Mississippi.
Chevron is the second-largest oil company in the U.S. behind Exxon Mobil Corp. so its updates and earnings are closely watched by investors. The third-quarter outlook was weaker than some analysts had expected.
"It stands to reason you can extrapolate that to some of the refiners as well," Morningstar Inc. analyst Allen Good said.
He noted that Chevron's marketing margins were weak, especially on the West Coast, which likely pressured share prices for other refiners that operate in the region.
"Refiners can be typically pretty volatile. And if there is this sort of weakness in margins, you can see the move," he said.
In afternoon trading, shares of Valero Energy Corp. fell $2.02, or 6.4 percent, to $29.38; Marathon Petroleum Corp. dropped $1.59, or 2.8 percent, to $55.54; Tesoro Corp. fell $2.52, or 6.2 percent, to $38.454 and Western Refining Inc. fell $1.74, or 6.6 percent, to $24.51.
Alon USA Energy Inc. was down 70 cents, or 5 percent, to $13.27 and Phillips 66 fell 84 cents, or 1.8 percent, to $45.26.