HF Sinclair Posts Larger-than-Expected Q4 Loss Due to Shrinking Refining Margins

HF Sinclair Corporation reported a larger-than-anticipated loss for the fourth quarter of 2023, driven by a decline in refining margins and an increase in global capacity.

U.S. refiners have experienced a downturn in earnings after reaching record highs in 2022. The post-pandemic recovery in demand and the impact of Russia's invasion of Ukraine had previously boosted fuel prices. However, refining margins in the U.S., measured by the 3-2-1 crack spread, declined to an average of $16.66 in the October-December quarter, a decrease of approximately 25% year-over-year.

Major competitors, including Valero Energy, Marathon Petroleum, Exxon Mobil, and Chevron, also reported lower earnings in the fourth quarter due to weaker refining margins. HF Sinclair's adjusted refinery margin was $6.86 per barrel, significantly lower than the $13.88 reported a year earlier.

On an adjusted basis, the Dallas-based firm recorded a loss of $1.02 per share for the quarter ending December. This exceeded analyst estimates of a loss of 90 cents, according to data compiled by LSEG.