Phillips 66 (NYSE: PSX) disclosed preliminary first-quarter 2026 financial guidance showing approximately $900 million in pre-tax mark-to-market losses due to sharp increases in commodity prices during the quarter.

The losses resulted from the company's net short position in crude oil, refined petroleum products, natural gas liquids and renewables feedstocks-related derivative contracts. Phillips 66 maintained approximately 50 million barrels in net short positions for crude and products-related derivative contracts as of March 31, 2026.

The mark-to-market losses were distributed across segments, with refining experiencing $350 million to $450 million in losses, marketing and specialties seeing $300 million to $400 million, and renewable fuels recording $100 million to $200 million in losses.

The company's refining segment faced additional headwinds from a $300 million unfavorable impact related to the standard two-week lag in Gulf Coast clean products pricing. The midstream segment was affected by producer downtime from Winter Storm Fern and accelerated depreciation at a Permian Basin gas plant.

Phillips 66's preliminary income estimates show midstream generating $550 million to $600 million before income taxes, while refining posted losses of $200 million to $400 million and marketing and specialties reported losses of $20 million to $170 million.

The commodity price volatility triggered approximately $3 billion in cash collateral outflows on derivative positions. Phillips 66 responded by drawing on credit lines, issuing a $2.25 billion 364-day term loan, and expanding its accounts receivables securitization facility from $1.25 billion to $1.75 billion.

As of March 31, 2026, the company maintained approximately $6 billion in liquidity and $22 billion in net debt. Phillips 66 stated it remains committed to reducing total debt to $17 billion by the end of 2027.