Replies to post #182 on Phillips 66 (PSX)

[eFinanceMarkets]

Top east coast refiner shuns Bakken delivery as Dakota Access Pipeline starts

Philadelphia Energy Solutions, the east coast's largest refiner, will take just five rail deliveries of North Dakota's Bakken crude oil in May and none in June, Reuters reports, a sign that the impending start of the Dakota Access Pipeline is upending trade flows.

At its peak, PES would have routinely taken ~3 miles' worth of trains filled with Bakken oil each day during its 2013-15 peak, but it will be more lucrative for producers to transport oil to Gulf coast refineries after Dakota
Access begins interstate crude oil delivery on May 14.

The long-delayed pipeline will provide a boost for Bakken prices and is seen as unofficially ending the crude-by-rail boom that had revived east coast refining operations.

The east coast reportedly has averaged just ~100K bbl/day of crude rail deliveries in recent weeks; east coast refiners operated by Phillips 66 (PSX -0.3%) and PBF Energy (PBF +0.2%) are still receiving modest volumes of Bakken crude.

PES is owned by Carlyle Group (CG) and a subsidiary of Energy Transfer Partners (ETP +0.7%).

[benfrankledger]

For the past few quarters, Phillips 66 has been spending well above its cash flow. Year to date, it generated $2.6 billion in cash flow from operations and distributed $2.2 billion to shareholders, with another $1.3 billion in capital expenditure. Stripping all else out, the company therefore burned through $900 million in cash this quarter.