Hollyfrontier profits fall again on weak refining margines
The refining business is a long way from where it was a year ago.
HollyFrontier, the Dallas-based oil refining company, reported profits for the first three months of 2014 were down more than a half from a year ago to $164 million.
CEO Mike Jennings attributed the fall to lower refining margins, as the price split between U.S. and European crude has narrowed. Sill, he added, conditions were improving.
“Refined product margins, although lower than the first quarter of 2013, showed nice improvement versus the back half of 2013,” he said in a statement. “We expect continued growth in North American crude oil production, which we believe will solidify our company’s structural advantage.”
Refineries in the western states had benefited from a glut of oil around Cushing, Okla. due to booming production in Texas and North Dakota. But as new pipeline capacity comes online, including the controversial southern leg of the Keystone XL, the glut has eased and the price split shrunk.
Last year refineries around West Texas saw huge profits as they bought crude on the cheap and then sold gasoline and other products at inflated prices based on European crude.
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