Phillips 66 Surges 3.5% on Strategic Refinery Flexibility and Sector Momentum

Summary
• Phillips 66 (PSX) surges 3.5% to $141.46, hitting an intraday high of $143.11
• CEO confirms capacity to process 100,000 bpd of Venezuelan crude at Gulf Coast refineries
• Valero Energy (VLO), sector leader, gains 5% as refining sector gains momentum

Phillips 66’s sharp intraday rally reflects a confluence of strategic operational flexibility and sector-wide optimism. With the stock trading near its 52-week high of $144.96, the move is fueled by management’s confirmation of Venezuelan crude processing capabilities and broader refining sector strength. Turnover of 621,753 shares underscores renewed institutional interest.

Strategic Refinery Flexibility and Sector Momentum Drive PSX Rally
Phillips 66’s intraday surge is anchored in its announced ability to process 100,000 barrels per day of Venezuelan crude at its Lake Charles and Sweeny refineries, a strategic move to capitalize on heavy sour crude discounts. This operational flexibility aligns with broader refining sector tailwinds, as lower WTI prices (projected at $51.42 for 2026) enhance refining margins. The stock’s 3.5% gain also reflects sector momentum, with Valero Energy (VLO) rising 5% on similar refining margin optimism.

Oil & Gas Refining Sector Gains Momentum as Valero Energy Surges 5%
The refining sector is experiencing a synchronized rally, with Valero Energy (VLO) leading the charge with a 4.998% intraday gain. Phillips 66’s 3.5% move, while robust, trails VLO’s performance, reflecting divergent capital structures and operational leverage. VLO’s stronger response to lower crude prices highlights its higher refining segment exposure, whereas PSX’s diversified midstream and chemicals operations moderate its pure-play refining exposure.

Options and ETFs Highlight Short-Term Bullish Setup for PSX
• RSI: 42.22 (oversold rebound)
• MACD: -0.86 (bullish crossover near signal line)
• 200D MA: 125.20 (well below current price)
• Bollinger Bands: 122.16–145.80 (price near upper band)

Phillips 66’s technicals suggest a continuation of its short-term bullish momentum. The stock is trading above its 200-day moving average and within a tight Bollinger Band range, indicating strong near-term conviction. For options traders, two contracts stand out:

• PSX20260116C130 (Call, $130 strike, 1/16/2026):
- IV: 80.40% (high volatility)
- Leverage: 10.74% (moderate)
- Delta: 0.727 (high sensitivity)
- Theta: -0.329 (rapid time decay)
- Gamma: 0.0178 (moderate sensitivity to price moves)
- Turnover: 6,450 (liquid)
This call option offers aggressive leverage for a 5% upside scenario (targeting $148.53), with a projected payoff of $8.53 per contract. Its high delta and gamma make it ideal for capitalizing on a breakout above $143.11.

• PSX20260116C135 (Call, $135 strike, 1/16/2026):
- IV: 44.54% (reasonable)
- Leverage: 20.54% (high)
- Delta: 0.691 (moderate sensitivity)
- Theta: -0.224 (moderate decay)
- Gamma: 0.0342 (strong sensitivity to price moves)
- Turnover: 2,078 (liquid)
This contract balances leverage and liquidity, offering a 5% upside payoff of $3.53. Its moderate delta and high gamma position it to benefit from a sustained rally toward the 52-week high.

Aggressive bulls should consider PSX20260116C130 into a break above $143.11, while conservative traders may target PSX20260116C135 for a measured breakout.

Backtest Phillips 66 Stock Performance
The backtest of the Philippine Stock Exchange (PSX) performance after a 4% intraday surge from 2022 to now shows favorable results. The 3-Day win rate is 54.68%, the 10-Day win rate is 56.41%, and the 30-Day win rate is 56.79%, indicating that the market tends to experience positive returns in the short term following the 4% increase. The maximum return during the backtest period was 4.10%, which occurred on day 59, suggesting that while the market can experience gains, the returns may not always be at the higher end of the spectrum.

Position for Continued Rally as PSX Tests 52-Week High
Phillips 66’s 3.5% intraday surge is underpinned by strategic refinery flexibility and sector-wide refining margin optimism. With the stock approaching its 52-week high of $144.96, key resistance lies at the Bollinger upper band ($145.80) and the 52-week high. A break above $143.11 could trigger a retest of $144.96, with momentum indicators suggesting the move has legs. Sector leader Valero Energy’s 5% gain reinforces the refining sector’s strength. Investors should watch for a close above $143.11 to confirm the breakout and consider the PSX20260116C130 call for aggressive exposure.