Phillips 66 posted a fall in quarterly profit on Tuesday, hurt by a slump in margins due to lackluster fuel demand.

The Houston-based refiner reported a net income of $346 million, or 82 cents per share, in the third quarter, compared with $2.1 billion, or $4.69 per share, a year earlier.

Refiners globally have seen a drop in profitability on soft consumer and industrial demand, especially in China, because of slowing economic growth and rising penetration of electric vehicles.

Storage tanks for crude oil, gasoline, diesel, and other refined petroleum products are seen at the Kinder Morgan Terminal, viewed from the Phillips 66 Company's Los Angeles Refinery in Carson, California, U.S., March 11, 2022. REUTERS/Bing Guan

U.S. refinery margins, measured by the 3-2-1 crack spread, dipped to $14.28 in mid-September, the lowest since early 2021, on lackluster fuel demand.

Energy majors such as Exxon Mobil, BP and Shell said earlier this month they expect weaker refining margins to weigh on their earnings in the third quarter.

However, Phillips 66's third-quarter adjusted profit came in at $2.04 per share, well above analysts' average estimate of $1.66, according to data compiled by LSEG, partly aided by a stronger performance of its chemicals segment.