Viva Energy Group Ltd is once again in the spotlight as trading resumes on the Australian Securities Exchange following the Australia Day long weekend. The company’s shares slipped 1.4% before the holiday, closing at A$2.08, while the broader S&P/ASX 200 managed a slight gain of 0.13%. Investors have taken a cautious approach as they await the fourth-quarter trading update, which is anticipated to greatly influence market sentiment going into 2026.
The recent pullback in share price is particularly interesting given that it coincided with a firming of oil prices and a reevaluation by global energy traders of refining margins, supply disruptions, and consumer demand trends. With markets shut on Monday, it remains to be seen how Viva’s stock will adjust, but analysts suggest that a complex interplay of macroeconomic oil dynamics and company-specific performance indicators will heavily impact the company’s share trajectory.
Refining Margins Under Scrutiny
At the core of the near-term outlook for Viva Energy lies the refining margin—the difference between crude oil input costs and the selling price of refined products like petrol and diesel. This margin is notoriously volatile and can rapidly shift due to fluctuations in global crude benchmarks, regional supply disruptions, and demand changes.
Currently, Brent crude is trading at around $65.81 a barrel, while U.S. West Texas Intermediate hovers near $61.01, with both seeing gains of over 2% in the previous trading sessions. Market analysts attribute this price stability to a combination of U.S. production issues and geopolitical uncertainties. For a company like Viva, rising crude prices can serve as a double-edged sword; they enhance the value of refined products but require corresponding adjustments in pump prices and wholesale contracts to maintain favorable margins.
Consumer Demand at the Forefront
Viva’s financial health is inextricably linked to the volume of fuel sold through its extensive network of service stations and convenience stores. Factors such as consumer fuel demand, traffic patterns, and in-store purchases play pivotal roles in revenue generation, particularly during peak travel times and public holidays. However, the competitive landscape complicates matters. Retail fuel pricing in Australia often lags behind shifts in wholesale markets, creating scenarios where discounting cycles can compress margins even when demand remains steady.
Investors will be keenly observing how Viva navigates these pressures and whether it can effectively pass higher operating costs, including those linked to energy and logistics, onto consumers.
Operational Risks at Geelong Refinery
Viva operates the Geelong refinery in Victoria, one of only two remaining refineries in the country, boasting a capacity of up to 120,000 barrels per day. This facility not only strengthens the company’s strategic position within the domestic fuel supply chain but also consolidates its operational risks.
Unplanned outages, maintenance issues, or inefficiencies at the Geelong site could significantly affect the group’s earnings. Conversely, consistent operational performance and strong utilization rates may allow Viva to capitalize more quickly on favorable market conditions compared to competitors that are more reliant on imported fuels.
As January 29 approaches, all eyes will be on Viva Energy for their upcoming trading update and February results, which are poised to guide the direction of ASX:VEA in the early weeks of 2026.
