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Which Refiner Had the Highest Refining Margin?

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Refining margins in Q1 2018

In this part, we’ll compare the gross refining margins (or GRM) of leading American downstream companies. Andeavor (ANDV) scored the highest gross refining margin in the first quarter, followed by Marathon Petroleum (MPC), Phillips 66 (PSX), and Valero Energy (VLO). These refining companies saw a mixed trend in their GRM readings in the first quarter year-over-year. Let’s look at these individual refiners’ margin performance metrics.

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Marathon Petroleum’s refining margin narrowed

In the first quarter, Marathon Petroleum’s (MPC) gross refining and marketing margin fell by $1.10 per barrel to $10.60 per barrel year-over-year. This fall was primarily due to narrower blended LLS 6-3-2-1 crack. Despite the decline, MPC’s refining margin ranked second among its peers.

Valero’s refining margin expands in Q1 2018

Valero (VLO) observed a year-over-year rise in its gross refining margin from $8.10 per barrel to $8.40 per barrel in the first quarter. In the first quarter, VLO’s diesel cracks have surged across its operating zones in the US Gulf Coast, the US West Coast, the US Mid-continent, and North Atlantic. However, in the first quarter, VLO’s gasoline cracks have fallen year-over-year in the US Gulf Coast and the US West Coast.

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Andeavor’s GRM surges

Andeavor (ANDV) saw a year-over-year rise in its gross refining margin by $1.40 per barrel to $10.90 per barrel in the first quarter. ANDV’s refining margin rose in the Inland (North Dakota, Utah, Minnesota, New Mexico, and Texas) region, which was partially offset by the falls in Pacific Northwest (Washington and Alaska) and California (Martinez and Los Angeles) regions. ANDV has the highest margin compared to its peers.

PSX’s refining margin rises

Phillips 66’s (PSX) worldwide refining margin rose by $0.70 per barrel (9.0%) year-over-year to $9.30 per barrel in the first quarter. This trend was due to a rise in the margins in two of its four operating regions. While the Central Corridor and the Atlantic Basin/Europe saw an increase in their margins in the first quarter, the West Coast and the Gulf Coast witnessed declines.

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