HollyFrontier posts bigger-than-expected loss on weak demand

US refiner HollyFrontier Corp reported a bigger-than-expected quarterly loss on Wednesday as renewed COVID-19 travel restrictions sapped fuel demand, sending its shares lower in premarket trading.

A resurgence in coronavirus cases globally has led to a new wave of curbs, hitting refiners who are also grappling with rising crude prices and higher costs related to the blending of renewable fuels into their products.

US refining margins were on average below $10 a barrel - the threshold above which most refiners make money - for the majority of the fourth quarter of 2020.

HollyFrontier said its quarterly refinery gross margins dropped 18.5% sequentially to $4.02 per barrel produced in the fourth quarter.

The company's quarterly refinery throughput, or the amount of crude processed, fell nearly 2% from the previous quarter to 412,780 barrels per day.

Like larger rivals Valero, Phillips 66 and Marathon Petroleum, HollyFrontier said it expects COVID-19 vaccine distribution to fuel a recovery in demand.

"We expect demand for transportation fuels will strengthen as COVID-19 vaccines are distributed and the global economy recovers from the pandemic," Chief Executive Officer Michael Jennings said.

The company's quarterly results were also weighed down by a jump in total operating costs and expenses, which rose 5.6% sequentially to $3.01 billion.

Adjusted net loss was 74 cents per share for the three months ended December, compared with analysts' estimates of a 71 cents per share loss, according to Refinitiv IBES data.