June 2008 -- Despite a strong 2007 and a perception in the marketplace that big oil producers are immune to
rising energy costs, oil refiner Sunoco Inc. reported a net loss of $59 million for the first
quarter of 2008 versus net income of $175 million for the first quarter of 2007. Revenues,
however, climbed to $12.8 billion for the quarter, an increase of 37% compared to the $9.3
billion reported in the comparable quarter in 2007.
"The first quarter market environment was clearly a challenging one for Sunoco and the refining
industry," said John Drosdick, chairman and CEO, in the company's April 30, 2008, quarterly
report. "While earnings from our non-refining businesses were significantly improved from prior
periods, our Refining and Supply business lost $123 million. The loss in Refining and Supply was
primarily the result of weakness in refined product margins, especially for gasoline, which were
compressed by the combination of higher crude oil costs and lower product demand."
Looking forward, Drosdick commented, "Recent declines in U.S. gasoline inventories and continued
low refinery utilization rates have led to some improvement in refining market fundamentals as
we enter the spring and summer driving seasons." Drosdick expects crude runs and production
levels in the second quarter to approximate 90% to 95% of capacity.
