High margins lift Chevron’s downstream earnings by nearly four times

US downstream operations at Chevron earned $889 million in the fourth quarter of 2014 compared with $265 million a year earlier.

The increase was mainly due to higher gains on asset sales compared to the year-ago period, according to the company. Higher margins on refined product sales also contributed to the increase.

Refinery crude oil input of 927,000 bpd in the fourth quarter of 2014 increased by 56,000 bpd from the year-ago period. The increase was primarily due to lower 2014 downtime at refineries in Pascagoula, Mississippi and Richmond, California.

Refined product sales of 1.23 million bpd were up 9,000 bpd from the fourth quarter of 2013, mainly reflecting higher gasoline sales. Branded gasoline sales of 509,000 bpd were down 1% from the 2013 period.

International downstream operations earned $629 million in fourth quarter of 2014 compared with $125 million a year earlier. The increase was mainly due to a favorable change in effects on derivative instruments and higher margins on refined product sales. 

This increase was partially offset by certain one-time employee benefits expenses in the current period. 

Foreign currency effects decreased earnings by $21 million in the 2014 quarter, compared with a decrease of $96 million a year earlier.

Refinery crude oil input of 822,000 bpd in the fourth quarter of 2014 decreased 56,000 bpd from the year-ago period, primarily due to the conversion of an affiliate refinery into animport terminal in Kurnell, Australia.

Total refined product sales of 1.55 million bpd in the 2014 fourth quarter were down 9,000 bpd from the year-ago period, mainly due to lower residual fuel oil sales. 

Overall, Chevron's quarterly profit dropped to the lowest since 2009 as collapsing global crude markets hurt upstream operations.