Why is this ASX 200 energy stock getting thumped by the market today?

Investors were not overly impressed with its quarterly update.

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The Ampol Ltd (ASX: ALD) share price is having a poor session on Tuesday.

In afternoon trade, the ASX 200 energy stock is down 3.5% to $36.77.

This compares unfavourably to a 0.2% gain by the benchmark ASX 200 index.

Why is this ASX 200 energy stock tumbling?

Investors have been heading to the exits today in response to the release of the fuel retailer's first quarter update. Unfortunately, as you might have guessed from its share price performance, Ampol didn't start the year in an overly positive fashion.

According to the release, the ASX 200 energy stock's refinery production fell 7.3% year on year to 1,381 ML.

Management advised that production levels were impacted by the refinery-wide steam outage and the temporary delay in supply of catalyst for the Alkylation Unit due to disruptions in the Red Sea.

The company's Lytton Refiner Margin (LRM) came in 21% lower than the prior corresponding period at US$11.80 per barrel.

The LRM represents the difference between the market value of importing a standard Lytton Refinery basket of products and the cost of importing the crude oil required to make that product basket.

According to Reuters, analysts at Jefferies were forecasting an LRM of US$13.00 per barrel, so this has fallen short of its expectations. Whereas Morgan Stanley was looking for an even better figure of around US$15.00 per barrel.

Management advised that Singapore refined product cracks reduced by approximately US$4 per barrel compared with the same time last year.

What about fuel demand?

Australian fuel sales volumes were largely in line with the prior corresponding period.

And while International fuel sales volumes were lower year on year, management advised that this was due to third party spot sales.

Integrated margins improved year on year with Ampol's integrated supply chain able to effectively manage the refinery and market disruptions experienced during the period.

Its Convenience Retail business delivered earnings slightly ahead of the same quarter last year. This was thanks to improved fuel margins more than mitigating lower fuel sales volumes, largely in base grade gasoline, in a higher input price environment.

Shop income grew year on year with improved gross margins and growth in sales, excluding tobacco.

Finally, the New Zealand segment grew RCOP earnings before interest and tax year on year. This includes the comparative benefits from the transition to Ampol supply from April 2023.

Despite today's weakness, this ASX 200 energy stock remains up over 23% since this time last year.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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