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MPC vs. ETF Alternatives
Marathon Petroleum Corp is a supplier of gasoline and distillates to resellers and consumers. Its refining, marketing and transportation operations are concentrated in the Midwest, Gulf Coast and Southeast regions of the U.S.
Monday, Apr 76:54 PM
Monday, Apr 76:54 PM| 2 Comments
- Cheap natural gas and oil supplies will give U.S. Gulf coast refiners an edge in global markets, but earnings could be dampened by new plants coming online in China and the Middle East that could outpace worldwide demand for refined products like gasoline, according to Moody's.
- While refiners such as Phillips 66 (PSX), Marathon Petroleum (MPC) and Valero (VLO) stand to gain from a growing bulge in oil supplies on the Gulf coast, Chinese refiners are scheduled to bring more than 1.2M bbl/day of capacity, and Middle Eastern refiners could add another 1M bbl/day, to market through next year.
- Moody’s says it expects global demand for refined products to grow by 1.2M bbl/day this year and for earnings to increase 8% by next year, though slowing economic growth in China could tilt the results downward.
Wednesday, Mar 2612:29 PM
Wednesday, Mar 2612:29 PM| 1 Comment
- The Houston Ship Channel has reopened all lanes of traffic; five vessels reportedly are entering the channel and 15 are on their way outbound, with another 15-20 expected to enter the channel before dark.
- Exxon Mobil (XOM +0.2%) says its Baytown, Tex., refinery is receiving crude shipments again and will adjust rates for refined fuels after reducing rates due to the closure of the Channel since a March 22 oil spill.
- Valero Energy (VLO -0.6%), Marathon Petroleum (MPC -0.1%) and Royal Dutch Shell (RDS.A, RDS.B), which own all or part of refineries on the 52-mile shipping lane, have declined to discuss operations at those plants.
Monday, Mar 249:41 AM
Monday, Mar 249:41 AM| 1 Comment
- The Houston Ship Channel, which delivers crude oil for more than 10% of all U.S. refining capacity, is shut for a third day as the cleanup from a Saturday spill threatens to last through the week.
- A collision between a Kirby (KEX) Inland Marine oil barge and a cargo ship spilled ~4K barrels of residual fuel oil; now, 43 ships are waiting to go out from the port of Houston and 38 ships are waiting to come in.
- Exxon Mobil (XOM) says the closure has not yet affected operations at its 560K bbl/day refinery in Baytown, Tex., second largest in the U.S.; Marathon Petroleum (MPC) has not discussed operations at its 451K bbl/day Galveston Bay refinery and 80K bbl/day Texas City refinery.
Monday, Mar 176:52 PM
Monday, Mar 176:52 PM| 7 Comments
- Pain for investors in refiners such as Valero (VLO), Tesoro (TSO), Phillips 66 (PSX), HollyFrontier (HFC) and Marathon Petroleum (MPC) may be ready to turn into gain, Barclays says as it sees the U.S. refining segment among the market’s best-performing groups over the next year or two.
- The firm thinks the narrow LLS-Brent differential during the past two months mostly has been due to poor weather affecting both production and the logistics necessary to transport the production to refineries.
- Barclays believes investors should overweight the entire U.S. refining industry, but particularly favors VLO, which is "best positioned to take advantage of the changing Gulf Coast crude oil landscape,” and TSO, when “investors start to shift their focus to relative underperformers within the refining sector.”
Wednesday, Mar 56:21 PM
Wednesday, Mar 56:21 PM| 10 Comments
- Energy Secretary Ernest Moniz said at the CERAWeek conference this week that the oil industry has failed to make a convincing case for why the U.S. government should allow the export of domestic oil when the U.S. still imports 5M bbl/day.
- The statement should please America's refiners, who have enjoyed increased profits from buying U.S. oil on the cheap to produce products such as gasoline.
- At the same time, Moniz went further than before in suggesting the Obama administration could redo the economic analysis that underpins its decisions on exporting American natural gas.
- Moniz also dismissed speculation that the Obama administration has in mind a hard cap on possible natural gas exports.
- Refiners: PSX, MPC, HFC, VLO, TSO, WNR, NTI, DK, CLMT, ALJ, CVI.
Thursday, Feb 273:46 PM
Thursday, Feb 273:46 PM| 2 Comments
- Oil refiners are getting hit today as Brent crude falls to its lowest price in more than a week on rising tensions in Ukraine, shrinking the premium to West Texas crude to the narrowest level since October.
- Given Ukraine’s location, the country's situation obviously will impact Brent more than WTI; meanwhile, WTI’s losses are limited after U.S. government data yesterday showed crude supplies at Cushing, Okla., declining to a four-month low.
- Phillips 66 (PSX -2.8%) has dropped 3.5% YTD, while Delek US (DK -5.3%) has plunged 17%, Valero (VLO -4.3%) has slipped 3.8%, Holly Frontier (HFC -3.1%) has fallen 8.2% and Marathon Petroleum (MPC -4.4%) is off 8.5% in 2014.
- Other decliners today: TSO -1.5%, ALJ -5.4%, WNR -4.2%, CVI -3.4%, CLMT -0.7%.
- ETFs: USO, OIL, UCO, SCO, DBO, DTO, BNO, CRUD, USL, DNO, UWTI, SZO, DWTI, OLO, OLEM, TWTI
Thursday, Feb 278:09 AM
Thursday, Feb 278:09 AM| Comment!
- MPLX agrees to acquire an additional 13% in MPLX Pipe Line Holdings from a subsidiary of Marathon Petroleum (MPC) for $310M, increasing MPLX's interest to 69% from its previous 56%.
- Pipe Line Holdings owns a 100% interest in Marathon Pipe Line and Ohio River Pipe Line, which own one of the largest networks of common carrier crude oil and product pipelines in the U.S. based on total volume delivered, a barge dock on the Mississippi River, and crude oil and product storage facilities.
- MPLX expects the deal to be immediately accretive to distributable cash flow.
- MPC owns 23% of MPLX, which went public in Oct. 2012.
Friday, Jan 312:56 PM
Friday, Jan 312:56 PM| 2 Comments
- Now that Valero Energy (VLO +0.3%), Phiilips 66 (PSX -0.1%) and Marathon Petroleum (MPC +0.4%) have reported earnings (I, II, III), Citigroup believes all three of the big refiners offer upside from current levels.
- The firm believes all three are equally well positioned to grow their midstream assets; MPC and PSX have their midstream assets positioned in the U.S. while VLO has some assets out of the U.S. which are less attractive from an MLP perspective.
- From a refining perspective, VLO and MPC are best suited to capture the advantage from growing U.S. crude production; VLO remains its preferred name in the space.
Wednesday, Jan 298:58 AM
Wednesday, Jan 298:58 AM| Comment!
- Marathon Petroleum (MPC) +0.4% premarket after Q4 earnings fell 17% Y/Y but easily beat expectations of Wall Street analysts, as adjusted earnings beat forecasts by nearly $1/share.
- The refining and marketing segment's operating income fell 15% to $971M, primarily due to narrower crude oil differentials and higher turnaround costs.
- Income from the smaller speedway segment rose 7.8%, and income from the pipeline transportation segment fell 35%.
- Revenue revenue rose 20% to $24.9B, while total costs and expenses climbed 23% to $23.9B.
- Gross margins came in at $7.64/bbl, far above Credit Suisse's estimate of $5.03/bbl, as MPC benefited from discounted Gulf coast crudes.
Wednesday, Jan 297:42 AM|Wednesday, Jan 297:42 AM| Comment!
Wednesday, Jan 2912:05 AM
Tuesday, Jan 285:30 PM
Friday, Jan 102:40 PM
Friday, Jan 102:40 PM| 5 Comments
- Chevron's (CVX -1.9%) earnings guidance isn't impressing investors; it expects Q4 profit to be "comparable" with Q3 when it posted net income of $4.95B, but analyst consensus had estimated Q4 to come in at $5.69B.
- Unlike last year, when CVX’s refining business was a drag on earnings while its upstream business was strong, now refining is providing the boost - good news for Exxon Mobil (XOM +0.1%) and refiners, Morgan Stanley says.
- MS thinks most U.S. refiners will show a Q/Q improvement in capture rates, helping XOM more than CVX due to its significantly more absolute North American refining capacity; marketing margins also are improving sharply, a positive indicator for refiners with retail operations such as Marathon Petroleum (MPC), Tesoro (TSO), Phillips 66 (PSX), Western Refining (WNR) and Delek US (DK).
Wednesday, Jan 810:49 AM
Wednesday, Jan 810:49 AM| 10 Comments
- Top oil refiner Valero (VLO -0.8%) is the first major company to publicly oppose relaxing the decades-old U.S. law that effectively bans crude oil exports, a predictable stance from an industry that has reaped the rewards of buying cheaper U.S. crude oil and selling it as refined fuels, but most refiners are steering clear of the fight.
- Phillips 66 (PSX -0.1%) says exports of crude oil and other products are good for the U.S. and contribute to a strong balance of trade, and Marathon Petroleum (MPC -1.2%) says it supports free markets.
- Sen. Lisa Murkowski, the top Republican on the Senate’s energy committee, and the American Petroleum Institute held events yesterday contributing to the momentum toward ending the ban.
Thursday, Jan 23:13 PM
Thursday, Jan 23:13 PM| Comment!
- Hess (HES -2.5%), increasingly reliant on rail to move its growing Bakken output, could be especially vulnerable to the possibility of more regulation on Bakken crude-by-rail transport, Mizuho says (Briefing.com).
- HES' Tioga rail facility handled 54K bbl/day of crude during Q3 2013, equivalent to 76% of HES' Q3 Bakken production and 83% of liquids production, the firm calculates.
- The Bakken already saw softer pricing in Q4; the WTI/Clearbrook differential was $11.53 in Q4 vs. less than $5 in Q3, and additional costs associated with stricter transport standards could squeeze margins further going forward for HES and Marathon Petroleum (MPC -2.7%), the firm says.
Tuesday, Dec 312013, 3:56 PM
Tuesday, Dec 312013, 3:56 PM| 9 Comments
- The energy sector - especially refiners - leads the stock market higher today even as crude oil trades lower, with Phillips 66 (PSX +3.2%) contributing to the strength after Berkshire Hathaway agreed to acquire its flow improver business (I, II).
- Berkshire's acquisition would seem to point to the next logical step for Warren Buffett’s empire building in the energy sector: investing in pipelines and, at the other end, the refineries that stand to benefit most from them.
- Today's refining stalwarts: VLO +3.7%, MPC +3.8%, HFC +2%, TSO +3.4%, WNR +3.1%, CVI +2.9%, ALJ +2.8%, NTI +2.8%.