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Marathon Petroleum Corporation (MPC)

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71.80-0.10 (-0.14%)
At close: 04:00PM EST
71.00 -0.80 (-1.11%)
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  • D
    Dennis
    $VLO conversation
    The following are the regional crack spread indicators ($/barrel) provided by Valero for
    Q4-21, Q3-21, and Q4-20, respectively:

    Gulf Coast_______ 11.72___10.63____3.82
    Mid Con__________ 9.98___10.89____4.03
    No Atlantic_______11.45___9.72____4.50
    West Coast_______16.16 __13.19 ___6.44
    Ethanol ($/gal)_____1.71____ .70_____ .24
    Renewable Diesel___2.03__ 1.84____2.04

    Cost of RINs (cents per gal)
    Ethanol___________112.8____141.4____62.4
    Biodiesel_________149.2____160.3____88.0

    These are the regional crack spread indicators ($/brl) provided by Marathon Petroleum for
    Q4-21, Q3-21, and Q4-20, respectively:

    Mid Con ______10.27____13.53___3.76
    Gulf Coast_____10.16____10.70___2.64
    West Coast ____16.50____14.60___7.81
    Blended_______11.47 ____12.61___4.12

    Please note:
    Calculation of crack spread indicators may not be comparable across the 2 companies.
    These are indicative, not actual. They will not reflect lower actual costs for purchases from non-typical crude sources. #MPC
  • F
    Fritz1967
    $VLO conversation
    iper Sandler makes bull case for global refining - PBF up, MPC down
    VLO, HFC, PSX, MPC, PBF

    Piper notes that a multi-year bull market in oil requires sustained demand growth for oil products; given low oil product inventory levels, accelerated capacity reductions, and sustained demand, Piper thinks there should be a multi-year bull market in refining.
    Piper upgrades high-cost, bad-balance-sheet PBF (NYSE:PBF) to buy given the Company's leverage to improving refining fundamentals; Marathon (NYSE:MPC) is lowered to hold, as valuation and refining leverage is relatively low when compared to peers.
    Top picks remain Phillips (NYSE:PSX) and Holly (NYSE:HFC).
    As it relates to capacity reductions, it's worth looking at the Phillips Rodeo refinery in San Francisco--as an oil refinery the asset can produce ~120kb/d of gasoline, diesel, jet and other oil products; the company is converting the refinery to a bio-diesel plant that will produce ~50kb/d of bio-fuel--the bio-fuel benefits from significant subsidy (rins, carbon credits, etc.) allowing Phillips to generate a strong return on the project, but the conversion reduces refined product supply by half, supporting oil product margins for Phillip's neighboring Carson and Wilmington refineries.
    Multiply this effect across Martinez, Dickinson, Cheyenne, Artesia, Wynnewood and other oil refineries--all biofuel conversions announced in recent years--and the result is a very tight domestic refining market.
    Given Piper's view of strong oil and strong refining markets, integrated names like Exxon (NYSE:XOM) and Chevron (NYSE:CVX) stand to benefit as the global economy emerges from the pandemic.
    With Valero's (NYSE:VLO) refining indicator margins at multi-year highs, even as international travel demand remains meaningfully curtailed, the market will focus on any indication of a super-cycle in refining coming out of the pandemic.

    #MPC, #HFC, #PSX
  • s
    steckbauer
    They had some interesting insights about MPC on (http://the-alphatrader.com/). Definitely made me think twice about the company.
  • F
    Fritz1967
    * Marathon Petroleum Corp : Goldman Sachs raises target price to $77 from $72
    * Marathon Petroleum Corp : RBC raises target price to $83 from $77
  • F
    Fritz1967
    $VLO conversation
    Global refinery closures outweigh new capacity in 2021: IEA


    2021 ends "on a high note" for global industry

    Capacity additions in 2022 could weigh on margins

    Refinery closures outweighed new capacity in 2021, leading to a drop in global capacity for the first time in 30 years, the International Energy Agency said in its latest monthly report Jan. 19.

    Global capacity fell by 730,000 b/d last year as close to 1.6 million b/d was shut or converted into bio-refineries and only 850,000 b/d new capacity came online.
    For 2022 the IEA forecasts 1.2 million b/d of new additions, while runs will rise by 3.7 million b/d to 81.2 million b/d.

    However, the reduced capacity last year led to improved refining margins, which "reached multi-year highs in Singapore and Europe at the end of 2021."

    Last year thus ended "on a high note" for the global refining industry, the IEA said, as both runs and margins improved "amid continuously tight product markets" in the last quarter of the year.

    Overall, 2021 gained 4.9 million b/d in terms of global refinery crude throughput to 80.2 million b/d.

    The IEA revised upwards its November global refinery crude throughput estimates by almost 1 million b/d to 80.8 million b/d "on stronger-than-expected activity in China, India and Europe." However, December runs are likely to ease by 500,000 b/d to 80.3 million b/d as refineries in China reduce their processing.

    Although runs increased in the fourth quarter, the agency estimated an "implied draw" of 1.3 million b/d in refined products as the increase was from a "low base" in the third quarter.

    However, new additions in 2022 and the subsequent increase of global runs could outpace the demand growth for refined products, "possibly leading to an unwinding of some of the refinery margin gains from late last year," it said

    New additions, closures
    New capacity is already coming up in China, according to S&P Global Platts data. China's privately held refining complex Shenghong Petrochemical is likely to start to feed crudes into its newly built 16 million mt/year crude distillation unit at the end of January. The refinery had initially planned to start up at the end of August.

    Private refiner Zhejiang Petroleum & Chemical fully started up commercial operations at it 400,000 b/d phase 2 refining and petrochemical project in early January.

    Elsewhere in Asia-Pacific, Pengerang Refining and Petrochemical integrated complex, also known as PRefChem, is expected to resume operations in the second quarter, possibly in May, after previously planning a 2021 restart. The refinery, also known as RAPID refinery, delayed its restart several times following a fire that broke out at the diesel unit in March 2020.

    Nigeria's Dangote refinery is on track to be operational from early this year despite some delays caused by shipping constraints.

    Two new additions in the Middle East -- Saudi Arabia's Jazan and Kuwait's Al-Zour -- appear to be on track for a full start in 2022.

    In January, Iran launched the first phase of a 70,000 b/d extra heavy crude plant on Qeshm island in the Persian Gulf.

    The new capacities follow a spate of closures or capacity reductions and conversions in 2020 and 2021.

    Gunvor mothballed its Antwerp refinery and shuttered the two crude processing units at Rotterdam.

    Petroineos' Grangemouth refinery in Scotland saw its capacity reduced by 30% to around 150,000 b/d after the closure of a CDU and the FCC.

    TotalEnergies' Grandpuits stopped crude processing in early 2021, ahead of conversion, while Portugal's Porto and Finland's Naantali also halted crude processing early last year and Norway's Slagen in mid-2021.

    Australia is now left with only two refineries after the closure of Altona and Kwinana, while New Zealand will see its only refinery Marsden Point convert into an import terminal from April.

    In the Philippines, Tabanagao refinery was shut in 2020 and converted into a terminal.

    Similarly in South Africa, Engen's Durban refinery has been offline throughout 2021 to be converted into a terminal.

    However, in 2022 another refinery in South Africa, Astron Energy's Cape Town, is expected to restart.

    Meanwhile, a number of refineries in North America, including Cheyenne, Rodeo, Martinez are converting into bio-refineries.

    #MPC, #PSX, #HFC, #CVE
  • G
    Gerald
    Marathon Petroleum Is Maintained at Strong Buy by Raymond James and raises price target to $87 from $85
  • D
    Dennis
    $VLO conversation
    Today’s EIA report showed an increase in US gasoline inventories of 5.9 million barrels, following an increase of 8.0 million barrels for the previous week.
    US gasoline demand was 8.2 mbpd vs 7.9 mbpd the previous week. This shows some improvement - I believe - as Omicron fears begin to subside.
    Distillate demand numbers were strong and US inventories were down
    #MPC #PSX
  • M
    Mick77
    Frigid temperatures Northern and Midwest and Northeast, if you have to drive your EV to work the next 2 days be sure to park where it is tow truck accessible.
  • F
    Fritz1967
    $VLO conversation
    Diesel Markets Are Soaring All Over the World

    Diesel Markets Are Soaring All Over the World

    Fri, January 14, 2022, 5:02 AM
    (Bloomberg) -- Diesel markets are jumping everywhere, a positive indicator for oil prices more widely.

    In Asia, the lowest inventories in years have driven margins from making the fuel to a four-month high. Winter there is chillier than usual and demand for transport, industrial and heating fuels are getting a boost.

    The continent is contending with significantly less supply from China, after the oil refining giant slashed its fuel export quotas in the first allocation for 2022.

    In the U.S., diesel prices have surged to highs not seen since 2014, driving up the cost of trucking, farming and -- in parts of the country -- heating homes. The surge is a blow to the Biden administration’s efforts to tame inflation.

    They’ve surged as U.S. refiners began a heavy maintenance season this month, when stockpiles there are already at eight-year lows. A fire at one of the country’s largest refineries took out even more fuel-making capacity at the end of last year.

    Rising jet fuel demand has also eaten into diesel output in recent months because refiners have scope to toggle between diesel and jet fuel, and they’re increasingly choosing the latter.

    That leaves Europe as the last big diesel-consuming center, and the market is strong there too in part because of the global effect of China’s reduced exports.

    So-called crack spreads, the fuel’s margin to crude, and time spreads that denote the strength of immediate supply-demand balances are rallying hard.

    Despite the strong market in Europe, the continent is still set to send large cargoes of the fuel to the U.S., further tightening the region’s market.

    The strong prices are a positive sign for the wider oil market. Diesel -- consumed in cars, trucks and heavy machinery among other things -- drives the cost of a wider group of petroleum products known as middle distillates that collectively account for about a third of the world’s fuel consumption.

    #MPC, #PSX, #HFC, #CVE
  • F
    Fritz1967
    $VLO conversation
    UPDATE 1-U.S. Energy Dept names 6 companies winners in sale of strategic crude reserves
    3:05pm ET, 01/13/2022 - Reuters
    (Adds details from statement)

    Jan 13 (Reuters) - The U.S. Energy Department said on Thursday that six companies were named winners in the sale of U.S. strategic crude reserves.

    The Energy Department sold 18.1 million barrels of Strategic Petroleum Reserve (SPR) crude oil to Valero Marketing and Supply, Phillips 66, Motiva Enterprises, Marathon Petroleum, Gunvor USA and Exxon Mobil, the department said in a statement.

    Valero Marketing and Supply bought more than 8 million barrels.

    The SPR plans to schedule deliveries between Feb. 1 and March 31, with early deliveries available in January if arrangements can be made, the department said.

    The congressionally mandated sale completes the requirement of the Bipartisan Budget Act of 2018 to sell a total of 30 million barrels during fiscal years 2022–2025, the Energy Department added.

    A total of 14 companies had submitted 111 bids for evaluation

    #MPC, #PSX
  • F
    Fritz1967
    $VLO conversation
    * Marathon Petroleum Corp : Citigroup raises price target to $85 from $72

    * Valero Energy Corp : Citigroup raises price target to $94 from $79

    #MPC
  • J
    Jim
    Thanks for data, Dennis. Numbers look good. VLO was up well today. MPC decent up and MRO exceptional.
  • J
    Jim
    Bought 2k shares on 3/2020 for 21.73 . I knew it was at a low, but was looking at the yield of 14.8% on the divy at that p/e ratio. I never thought the share price would go to these heights. Of course the yield is now 3.29% at the current price, but my divy income is still the same. I don't know if I'd ever sell with my effective yield being what it is from my buy-in price as it's in my retirement portfolio.
  • J
    Jim
    Besides enjoying MPC's pps going up, I really appreciate them reporting earnings on Feb 2. By comparison, MOC reports on Feb. 16, 2 weeks later! This makes our planning/actions, hopefully before a mkt correction, so much easier.
  • D
    Dennis
    For what it's worth
    HOUSTON (Reuters) 1/12/22 - Negotiators for the United Steelworkers union and Marathon Petroleum Corp, which is representing oil refiners and chemical makers, are scheduled to begin talks on Thursday on a new contract for 30,000 workers across the United States.
    The existing national bargaining agreement expires Feb. 1. #VLO #PSX
  • D
    Dennis
    $VLO conversation
    Unfortunately, today's EIA report showing gasoline inventories increasing by 8.0 million barrels last week was a punch in the stomach to what was a nice refiner ralley. Distillate fuel inventories also increased by 2.5 million barrels. Hopefully this is not a trend. #MPC #PSX
  • M
    Mike
    I bought all through out 2020 and am sitting on some pretty large gains. debating if i should start slowing reducing my shares. I don't see this going past $75 unless we see $100 oil which likely won't happen until the virus get controlled. for you other long term holders, what are your thoughts.
  • D
    Dennis
    $VLO conversation
    2022 Outlook: The Rubber Meets the Road – MS January 12, 2012
    Despite near-term COVID-related risks, we are optimistic that 2022 will be a year of continued recovery in refined product demand, with jet fuel a key contributor.

    Commodity futures look robust, but equity valuations less so, suggesting a favorable setup for the group in 2022. Signs of recovery in 2021, but not there yet…The R&M group rallied ~25% in 2021, but ultimately performed in-line with the S&P 500. Product pricing moved higher with crude prices, and importantly, crack spreads were quite robust in 2H21. Product stocks remain low, suggesting a continued need for high pricing to stimulate strong refinery runs. Yet, the industry is trading at a decade low absolute discount vs. the market. We therefore see upside not only to consensus estimates but to industry-wide multiples as well.

    This looks to be the year when the proverbial rubber meets the road in proving out bull/bear cases for the future of refined product demand. We are of the view that the pandemic has not structurally altered the course of near-term refined product demand. We expect robust diesel demand, stable gasoline demand, and, perhaps more controversially, a meaningful recovery in jet fuel demand in 2H22. We summarize three key debates we see driving the sector in 2022(more inside):

    -Will refined product demand look structurally different "post-COVID"? We are generally of the view that, in the near term, trends in global transportation have not been meaningfully altered by the pandemic. Jet demand is the most important to watch.

    -Is the high-return for renewable diesel (RD) already over? High supply growth is somewhat concerning, but federal and state policy support, as well as actual project ramp-ups, are key catalysts. We remain upbeat on RD earnings power.

    -Can refiners thrive in a world of E&P capital discipline and OPEC+ control? Crude supply will likely remain tighter than last cycle, but a lot of heavy and medium barrels will be coming to market in 2022 to ease some pressure on complex refiners.

    Top picks for 2022: VLO is our top large cap pick on meaningful upside revision potential. HFC and MPC (both rated OW) have "de-risking" catalysts ahead, though we're less tactically bullish on these two. We remain UW DK and EW PBF and PSX, but are tactically constructive on PBF.

    Ratings and Price Targets
    Delek US Holdings Inc - UW, Price Target $23.00 to $19.00
    Holly Frontier Corp - OW, Price Target $48.00 to $44.00
    Marathon Petroleum - OW, Price Target $85.00 unchanged
    PBF Energy Inc – EW, Price Target $17.00 to $20.00
    Phillips 66 - EW, Price Target $95.00 to $100.00
    Valero Energy Corporation – OW, Price Target $92.00 to $100.00
    #MPC #PSX
  • J
    Jim
    How do you feel about MPC over the next 2-5 years, Dennis? I've been taking profits on small sells but have a lot of it left and I'm well up after a long hold.
  • J
    Jim
    The negotiations are a big deal, hope MPC handles it well. I read the refinery workers make $44 per hour after 4 years and have great benefits. You add in a little O.T. and it's easily over $100K/yr.