Phillips 66 to Lay Off Nearly Half of California Refinery Staff
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 05 2026
0mins
Should l Buy PSX?
Source: seekingalpha
- Layoff Announcement: Phillips 66 will lay off 122 employees at its California refinery effective April 3, reducing the workforce to approximately 300, indicating a significant contraction in the company's refining operations.
- Closure of Historic Refinery: The century-old refinery, which once processed 139,000 barrels of oil per day, has ceased operations as of late last year, marking the end of the company's refining presence in California.
- Total Employee Reduction: This layoff follows a previous notice of 155 job cuts, bringing the total layoffs to 277, reflecting the company's strategic response to market challenges that may impact its market share in California.
- Industry Implications: The reduction in refining operations will negatively affect the employment landscape in California and could disrupt the regional fuel supply chain, intensifying competition within the industry.
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Analyst Views on PSX
Wall Street analysts forecast PSX stock price to fall
15 Analyst Rating
8 Buy
7 Hold
0 Sell
Moderate Buy
Current: 156.260
Low
110.00
Averages
132.40
High
162.00
Current: 156.260
Low
110.00
Averages
132.40
High
162.00
About PSX
Phillips 66 is a diversified and integrated downstream energy provider that manufactures, transports and markets products. The Company's Midstream segment provides crude oil and refined petroleum product transportation, terminating and processing services, as well as natural gas and natural gas liquids (NGL) transportation, storage, fractionation, gathering, processing and marketing services. Its Chemicals segment consists of its 50% equity investment in Chevron Phillips Chemical Company LLC, which manufactures and markets petrochemicals and plastics on a worldwide basis. Its Refining segment refines crude oil and other feedstocks into petroleum products, such as gasoline, distillates, including aviation fuels. Its Marketing and Specialties segment purchases for resale and markets refined products, mainly in the United States and Europe. Its Renewable Fuels segment processes renewable feedstocks into renewable products at the Rodeo Renewable Energy Complex and at its Humber Refinery.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Declining Crude Prices: The EIA forecasts that Brent crude will average $58 per barrel in 2026, down from $69 in 2025, providing refiners with lower input costs and potentially higher margins.
- Optimistic Investment Outlook: Given the current market dynamics, refining stocks have shown impressive performance with a year-to-date return of 25% in 2026, making a modest investment a potentially lucrative opportunity for investors.
See More
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- Refining Margins Surge: In 2026, refiners like Marathon Petroleum reported a margin of $18.65 per barrel, a 50% increase year-over-year, indicating strong profitability in the refining sector amidst falling crude prices, which is likely to attract more investor interest.
- Demand Growth vs. Capacity Constraints: Despite forecasts of declining crude prices, the EIA projects a 1.2 million barrels per day increase in liquid fuel consumption in 2026, driving demand for gasoline, diesel, and jet fuel beyond refining capacity, thereby enhancing profit margins for refiners.
- Strong Market Performance: As of February 11, 2026, stocks of Marathon Petroleum, Phillips 66, and Valero Energy have risen 28%, 25%, and 25% year-to-date, significantly outperforming the S&P 500's 1.6% increase, reflecting robust market confidence in the refining industry.
- Optimistic Future Outlook: While risks such as Middle Eastern conflicts or economic recessions exist, refining stocks are seen as having further upside potential, making a $1,000 investment at this time potentially lucrative, especially given the positive industry outlook.
See More
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- Optimistic Refining Outlook: The drop in crude oil prices has led to Marathon Petroleum achieving a fourth-quarter profit margin of $18.65 per barrel, approximately 50% higher than the previous year, indicating strong profitability and market demand for refiners.
- Sustained Demand Growth: Global liquid fuel consumption is projected to increase by 1.2 million barrels per day in 2026 and another 1.3 million barrels per day in 2027, primarily driven by manufacturing, trucking, and air travel, further solidifying the refining sector's market position.
- Significant Margin Increases: The 3-2-1 crack spread rose about 45% in the fourth quarter, indicating expanded profit margins for refiners, with Phillips 66's margin doubling to $12.48 per barrel and Valero's margin climbing 61%, reflecting a robust industry recovery.
- Positive Future Outlook: Despite risks from potential Middle East conflicts or economic recessions, crude prices are expected to continue falling, with the EIA forecasting an average Brent crude price of $58 per barrel in 2026, which bodes well for refiners and their shareholders.
See More
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- Surprise Profit: PBF Energy reported an adjusted profit of $0.49 per share in Q4, surpassing estimates of a $0.10 loss, indicating a significant rebound in refining margins due to supply disruptions from the Russia-Ukraine war and improved crude price differentials.
- Refining Margin Recovery: The U.S. refining sector experienced a sharp recovery in Q4, with the 3-2-1 crack spread benchmark rebounding from multi-year lows earlier in 2024, driven by tighter global fuel supplies and seasonal demand increases, which bolstered profitability.
- Increased Throughput: PBF's crude oil and feedstocks throughput rose to 888,900 barrels per day in the reported quarter, up from 862,000 barrels per day a year earlier, reflecting the company's ability to capitalize on market recovery opportunities.
- New Refinery Construction Update: PBF expects the construction of its Martinez refinery in California to be completed by February 16, 2026, with the catalytic cracking unit anticipated to start in the first week of March, further enhancing the company's production capacity and competitive position in the market.
See More
Phillips 66 Declares Quarterly Dividend Increase
- Dividend Increase: The board of directors of Phillips 66 has declared a quarterly dividend of $1.27 per share, reflecting a $0.07 increase, payable on March 4, 2026, demonstrating the company's confidence in its future cash flows.
- Commitment to Returns: CEO Mark Lashier emphasized that the strength and durability of cash flows from their combined businesses support the priority of returning capital to shareholders through a secure, competitive, and growing dividend.
- Historical Performance: Since its formation in 2012, Phillips 66 has increased its annual dividend every year, achieving a significant 15% compound annual growth rate, showcasing the company's ongoing commitment to shareholder returns.
- Company Overview: Phillips 66 is a leading integrated downstream energy provider, involved in midstream, chemicals, refining, marketing, and renewable fuels, dedicated to safely and reliably providing energy while pursuing a lower-carbon future.
See More
PHILLIPS 66 DECLARES RISE IN QUARTERLY DIVIDEND
- Dividend Announcement: Phillips 66 has announced an increase in its quarterly dividend.
- Financial Impact: The increase reflects the company's strong financial performance and commitment to returning value to shareholders.
See More
