U.S. refiner HollyFrontier Corp HFC.N on Thursday posted a smaller-than-expected quarterly loss on the back of cost cuts and a recovery in fuel prices.
Oil refiners have been forced to cut production and slash spending as they struggle with months of sluggish demand as coronavirus-led lockdowns wrecked the need for travel.
While demand for fuel has gradually picked up with the reopening of economies, a resurgence in coronavirus infections has threatened the recovery.
The refiner said the amount of crude it processed rose 11.5% to 421,100 barrels per day (bpd) in the third-quarter from the second, but was still 17% lower than a year earlier.
It expects to run 360,000 bpd to 380,000 bpd of crude at its refineries in the current quarter.
The slump in demand for gasoline, coupled with investor push for clean energy, has pushed refiners to accelerate plans for retrofitting facilities to produce so-called renewable diesel made from cooking oil and fats.
HollyFrontier said it would look heavily towards investing in its renewables business. It ran the last barrel of crude oil at Cheyenne refinery in Wyoming in August and had begun converting the facility to produce renewable diesel.
Last month, rival Valero raised its bet on the future of renewable diesel by allocating a larger portion of planned expenses to such projects, though it also cut its overall investment budget for the year.
HollyFrontier now expects full-year capital expenditure to range between $475 million and $550 million, compared with its prior expectations of between $525 million and $625 million.
Its shares rose as much as 4.2% to $19.51 after the company posted a loss of 41 cents per share, smaller than 53 cents loss expected by analysts, according to Refinitiv IBES.
Reporting by Arunima Kumar in Bengaluru; Editing by Shailesh Kuber and Anil D’Silva.
