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MPC, VLO, ANDV, PSX: How Their Refining Margins Compared in 3Q17

Maitali Ramkumar - Author

Nov. 16 2017, Updated 7:32 a.m. ET

Refining margins in 3Q17

In this part, we’ll compare the gross refining margins (or GRM) of leading American downstream companies. Andeavor (ANDV) had the highest gross refining margin in 3Q17, followed by Marathon Petroleum (MPC), Valero Energy (VLO), and Phillips 66 (PSX). The refining companies saw a rise in their GRM in 3Q17 over 3Q16. Let’s delve deeper into the refiners’ margin performances.

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Marathon Petroleum’s refining margin

Marathon Petroleum’s refining and marketing margin rose by $3.5 per barrel over 3Q16 to $14.1 per barrel in 3Q17. The rise was majorly due to the wider blended LLS 6-3-2-1 crack. The refining segment’s operating income rose from $252 million in 3Q16 to $1,097 million in 3Q17.

Valero’s refining margin in the third quarter

Valero Energy (VLO) saw a rise in its gross refining margin by $2.2 per barrel YoY to $10.9 per barrel in 3Q17. VLO’s gasoline and diesel cracks have surged across its operating zones in the US West Coast, North Atlantic, the US Mid-Continent, and the US Gulf Coast year-over-year in 3Q17. Similarly, the Brent-WTI (West Texas Intermediate) and Brent-LLS (Louisiana Light Sweet) oil spreads have widened in 3Q17 compared to 3Q16. However, the Brent-Maya and Brent-ANS (Alaska North Slope) spreads have narrowed year-over-year.

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Andeavor’s GRM

Andeavor (ANDV) saw an expansion in its gross refining margin by $6.0 per barrel YoY to $15.1 per barrel in 3Q17. ANDV’s refining margin rose across its operating zones in the Pacific Northwest, California, and Mid-Continent.

PSX’s refining margin in 3Q17

Phillips 66’s global refining margin expanded by $3.3 per barrel, or 45%, in 3Q16 to $10.5 per barrel in 3Q17. The largest rise of $5.0 per barrel, or 99%, YoY came from the Atlantic Basin/Europe region. Moreover, the West Coast recorded a $3.9 per barrel, or 43%, YoY rise in refining margins. Plus, the margins in the Central Corridor surged by $2.9 per barrel, or 26%, YoY in 3Q17. Also, the Gulf Coast margins rose $1.8 per barrel, or 33%, YoY in 3Q17.


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