The refinery of Delta Air Lines in Trainer posted a $28 million loss in the first quarter of this year, after seven consecutive quarters of profitability, writes Linda Loyd of the Philadelphia Inquirer.
According to Loyd, Delta did not detail on a conference call with investors why the refinery lost money, after reporting an $8 million profit in the last three months of 2015 and a $106 million profit in the third quarter last year.
Oil analyst Ben Brockwell at the Oil Price Information Service, who follows the aviation industry, said Trainer went “from black to red” for a couple of reasons: higher costs for production ingredients and lower returns on the gasoline and diesel products the refinery produces and trades in exchange for jet fuel.
“Delta’s refinery crude feedstock costs have been hurt by U.S. domestic crude prices losing the price advantage of imported foreign crude,” Brockwell said.
Delta signed a five-year deal in July 2014 to buy 65,000 barrels a day of U.S. domestic crude, which at the time was much cheaper than offshore imported crude, he said.
“Starting in the second half of last year,” domestic crude from the Midwest “lost its advantage relative to imported crude because of logistics: getting the stuff to the East Coast, the issues with transportation, insurance, spills,” Brockwell said.
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