(Reuters) -U.S. refiner HF Sinclair on Thursday beat third-quarter profit estimates, helped by resilient demand for refined products amid tight supplies.
Shares of the company were up 2.7% at $57.26 in premarket trading.
Demand for refined products remained stable during the quarter after the voluntary production cut from top OPEC+ oil producers Saudi Arabia and Russia, low levels of crude stockpiles in the U.S. and increased exports kept supplies tight.
However, margins at U.S. refiners took a hit after crude prices eased from last year's Russia-Ukraine conflict.
The 3-2-1 crack spread, an indicator of refining margins, dropped by about 35% in the third quarter.
HF Sinclair's refinery gross margin contracted to $26.59 per barrel in the quarter from $31.47, a year earlier.
Crude oil charge averaged 601,930 barrels per day (bpd) for the reported quarter, down 6.8% from last year. Refinery utilization was 88.8% in the quarter compared with 95.2% last year.
This decrease was primarily a result of turnarounds at Tulsa and Casper refineries.
However, earnings got a boost from strong results from its lubricants and specialty products unit.
Core profit from the segment jumped to $118.4 million in the quarter, compared with $15.2 million reported last year.
The company's lubricants and specialty products segment is the integrated business of processing feedstocks into base oils and processing base oils into finished lubricant products along with the packaging, distribution and sales to customers.
HF Sinclair reported an adjusted profit of $4.06 per share for the quarter ended Sept. 30, compared with analysts' average estimate of $3.67, according to LSEG data.