Exxon to send its first fuel shipment from US Gulf Coast to Australia, sources say | ReutersSkip to main contentExclusive news, data and analytics for financial market professionalsLearn more aboutRefinitivExxon Mobil logo and stock graph are seen through a magnifier displayed in this illustration taken September 4, 2022. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab- Companies- Summary- Traders skeptical about whether US Gulf to Australia route will remain open- Asian refiners st ...

Equities - Global equity markets experienced continued selling, with US stock index futures down across the board, particularly the March Nasdaq down 560 points (2.2%) and the March S&P down 125 points (1.8%) [1] - European markets showed more vigorous selling, with France's CAC 40 down 1.4% in early trade [1] - The S&P 500 is showing a bearish technical pattern, indicating an intermediate-term downtrend, raising concerns about the potential impact on global investors [1] Metals - The global silver market is climbing, with Shanghai silver prices exceeding $100 for the first time, and the Cash Index for silver hitting a high of $95.50 [3] - The March futures contract for silver reached a new all-time high of $95.41, indicating characteristics of both short supply and sustained demand [3] - The Cash Index for gold climbed to a new high of $4,737.21, up $66.32 (1.4%) for the day, driven by central bank buying [3] Energies - The natural gas market saw significant gains, with the spot-month contract up 67.1 cents (21.6%) from last Friday's settlement, driven by weather forecasts predicting a winter storm [4] - The strong rally in natural gas is expected to influence funds to cover their short positions, combined with seasonal tendencies [4] - Spot-month distillates, including heating oil and diesel fuel, also posted strong rallies this week, while crude oil prices followed at a distance [4]

Financial Data and Key Metrics Changes - The company reported a first quarter net loss of $0.24 per share and returned over $1,300,000,000 to shareholders through dividends and repurchases [18][19] - Adjusted EBITDA for the quarter was approximately $2,000,000,000, lower sequentially by $145,000,000 due to decreased results in refining and marketing and renewable diesel segments [19][21] - Operating cash flow excluding changes in working capital was $1,000,000,000 for the quarter, driven by the strength and growth of the midstream business [23] Business Line Data and Key Metrics Changes - Refining utilization was 89%, processing 2,600,000 barrels of crude per day, with significant planned turnaround activity particularly in the Gulf Coast region [5][19] - The Midstream segment adjusted EBITDA grew 8% year over year, with MPC receiving $619,000,000 in distributions from MPLX, a 12.5% increase compared to the previous year [6][20] - The renewable diesel segment faced challenges with a 70% utilization rate due to unplanned downtime, and changes in regulatory credits reduced margins across the industry [21][22] Market Data and Key Metrics Changes - Refined product inventories have drawn for the ninth straight week and are below the five-year average, which, along with lower retail prices, is expected to support demand during the summer driving season [7][8] - The company anticipates around 800,000 barrels per day coming offline across several refineries in the U.S. and Europe this year, which could strengthen margins [8][10] Company Strategy and Development Direction - The company is progressing a $1,250,000,000 standalone capital plan for 2025, with 70% targeted on high return projects [13] - Investments in the West Coast value chain are aimed at enhancing competitiveness and compliance with tighter emission regulations [9][10] - The company aims to leverage its fully integrated refining system and geographic diversification to deliver peer-leading cash generation [14] Management's Comments on Operating Environment and Future Outlook - Management noted improved refined cracks and strong demand signals, with expectations of 94% utilization in the second quarter [33][34] - The company remains optimistic about demand growth across its domestic and export businesses, with steady year-over-year demand for gasoline and growth in diesel and jet fuel [35][36] - Management emphasized the importance of operational excellence and commercial execution to deliver sustainable financial performance [28][29] Other Important Information - The company is focused on optimizing its portfolio to deliver outperformance and is committed to capital allocation that enhances competitiveness [29] - The company has a minimum cash target of $1,000,000,000 on the balance sheet to ensure sufficient liquidity [63][64] Q&A Session Summary Question: What is the current demand perspective as the company enters the second quarter? - Management observed improved refined cracks and strong demand signals, indicating readiness to meet seasonal demand [33][34] Question: How does the company view the long-term outlook for the West Coast? - Management believes investments in the LA asset provide a competitive advantage, and they are closely monitoring the regulatory environment [39][41] Question: What is the company's strategy regarding capture rates? - Management highlighted the importance of commercial performance and aims for capture rates approaching 100% through sustainable advantages [52][56] Question: What is the outlook for crude quality discounts? - The company expects to benefit from heavy crude runs and sees upside in Canadian crude pricing due to OPEC's increased volumes [71][72] Question: How sustainable is the 12.5% distribution growth from MPLX? - Management indicated that the 12.5% distribution increase is expected to be durable for multiple years, supported by growth opportunities and capital discipline [75][78] Question: What initiatives are being taken to improve the renewable diesel business? - Management is focused on optimizing operations and addressing unplanned downtime to enhance profitability [90][92]

Financial Data and Key Metrics Changes - The company reported a first quarter net loss of $0.24 per share, with adjusted EBITDA approximately $2,000,000,000, which decreased sequentially by $145,000,000 due to lower results in refining and marketing and renewable diesel segments [18][19] - The company returned over $1,300,000,000 to shareholders through dividends and repurchases during the quarter [18] - Operating cash flow excluding changes in working capital was $1,000,000,000 for the quarter, driven by the strength and growth of the midstream business [23] Business Line Data and Key Metrics Changes - Refining utilization was at 89%, processing 2,600,000 barrels of crude per day, with significant planned turnaround activity particularly in the Gulf Coast region [4][19] - The Midstream segment adjusted EBITDA grew 8% year over year, with $619,000,000 received from MPLX, a 12.5% increase compared to the previous year [20][21] - The renewable diesel segment faced challenges with a 70% utilization rate due to unplanned downtime, but actions are being taken to optimize production [21][22] Market Data and Key Metrics Changes - Refined product inventories have drawn for the ninth straight week and are below the five-year average, which, along with lower retail prices, is expected to support demand during the summer driving season [6][7] - The company anticipates around 800,000 barrels per day coming offline across several refineries in the U.S. and Europe this year, which could strengthen margins [7][10] Company Strategy and Development Direction - The company is progressing a $1,250,000,000 standalone capital plan for 2025, with 70% targeted on high-return projects [12] - Investments are being made in the fully integrated West Coast value chain, particularly in the Los Angeles refinery, to improve reliability and energy efficiency [8][9] - The company aims to leverage its geographic diversification and integrated refining system to deliver peer-leading cash generation [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding demand, noting steady year-over-year demand for gasoline and growth in diesel and jet fuel, with no signs of an economic slowdown [36][37] - The company believes that the U.S. refining industry will remain structurally advantaged due to locational advantages and flexibility in refining systems [10][11] - Management is focused on optimizing operations and capital allocation to enhance competitiveness and deliver strong financial performance [28][29] Other Important Information - The company is managing its balance sheet to maintain an investment-grade credit profile, with a minimum target of $1,000,000,000 in cash [24][25] - The company has a strong liquidity position with $3,800,000,000 in consolidated cash and undrawn credit facilities of $5,000,000,000 [25] Q&A Session Summary Question: Demand perspective and economic slowdown - Management noted refined cracks have improved, indicating a seasonal uptick in demand, with overall utilization projected at 94% for the second quarter [34][35] Question: West Coast outlook and political environment - Management highlighted investments in the LA asset and the competitive advantage of their integrated operations, while monitoring regulatory changes closely [40][42] Question: Capture rates and commercial performance - Management emphasized the importance of commercial performance and sustainable advantages built over the years, aiming for capture rates approaching 100% [55][58] Question: Crude quality discounts and OPEC volumes - Management expressed optimism regarding benefits from heavy crude processing, anticipating discounts to improve due to OPEC's increased volumes [74][75] Question: Midstream growth and distribution sustainability - Management confirmed a durable growth outlook for MPLX distributions, supported by ongoing projects and capital discipline [78][82] Question: Renewable diesel profitability and operational reliability - Management is focused on optimizing operations and addressing challenges from Q1, with expectations for an EBITDA positive quarter in Q2 [120][121]