Key Takeaways Phillips 66's refining segment posted strong gains in 2025, supported by robust refining margins.PSX's refineries can run heavy sour crude like WCS, expected to get cheaper in the coming quarters.More Canadian supply and possible Venezuelan crude may pressure heavy prices, supporting Phillips 66.Phillips 66 (PSX) is a diversified energy company with operations spanning multiple sectors, including refining, midstream, chemicals, renewable fuels and marketing. PSX’s refining segment has reported ...

Group 1: Investment Trends - U.S. investors are increasingly investing in Canada's fossil fuels sector, with U.S. funds now owning nearly 60% of the Oil & Gas sector due to low costs, favorable policy changes, and the completion of the Trans Mountain Pipeline (TMX) expansion [1] - This marks a significant shift from a decade ago when global funds were divesting from Canadian oil sands due to low global oil prices, high production costs, and environmental concerns [1] Group 2: Market Dynamics - Demand for heavy Canadian oil has surged, particularly from China, narrowing the discount on Canadian crude compared to West Texas Intermediate (WTI) to $10-$12 per barrel, down from approximately $50 per barrel seven years ago [2] - The completion of TMX has enabled Canada to export up to 890,000 barrels of crude a day to China and Asia, affecting supply to the U.S. Midwest and Gulf Coast [2] Group 3: Refinery Adaptations - Refineries in the Asian market have become accustomed to Western Canadian Select (WCS) and have made capital improvements to convert heavier oils into more valuable refined products [3] - The heavy crude from Alberta oil sands, characterized by a low API gravity of around 19 to 22 degrees, generally trades at a discount to lighter crudes due to its lower quality and higher sulfur content [4]