(Reuters) -U.S. refiner Phillips 66 (NYSE:PSX) on Friday promised to resume share buybacks in the current quarter, after posting a quarterly profit that surpassed Wall Street expectations as demand for fuel and refined products hovered near pre-pandemic levels.
Western sanctions on Russia for invading Ukraine have tightened crude oil supplies worldwide at a time when fuel demand is surging as economies reopen after a prolonged period of pandemic-related lockdowns.
In addition, a drop in refining capacity due to pandemic-induced shutdowns of unprofitable refineries is helping those that have their facilities up and running to cater to the growing global demand for fuel.
Phillips' overall product supplied, a proxy for demand, rose to 21.1 million barrels per day in the third week of March and was near pre-pandemic levels.
The Houston-based company said its first-quarter realized refining margins more than doubled to $10.55 per barrel, while total processed inputs worldwide rose 7.7% to 1.9 million barrels of oil per day.
Phillips joins rival Valero Energy Corp (NYSE:VLO) in handily beating earnings expectations this earnings season. Marathon Petroleum (NYSE:MPC) is also expected to post a quarterly profit when it reports earnings next week.
"We believe current market conditions will allow us to increase shareholder returns by restarting share repurchases and increasing the dividend," Phillips Chief Executive Officer Greg Garland said.
Phillips 66 had suspended share buybacks in March 2020 in response to the pandemic.
Its adjusted net income of $1.32 per share for the quarter beat analysts' average estimate of $1.22, according to Refinitiv data.
Earlier this month, Phillips 66 promoted Chief Operating Officer Mark Lashier to take over the company's helm from Greg Garland in July.
The company said net income was $582 million, or $1.29 per share, for the quarter ended March 31, compared with a loss of $654 million, or $1.49 per share, a year earlier.