What to Expect from Marathon Petroleum’s Refining Earnings



Marathon Petroleum’s refining earnings

In this part, we’ll discuss the trend in Marathon Petroleum’s (MPC) refining earnings pointers.

Marathon Petroleum’s refining margin and earnings are impacted by the blended LLS 6-3-2-1 crack, the LLS-WTI spread, and the sweet-sour differential. According to Marathon Petroleum, a dollar per barrel rise in the blended LLS 6-3-2-1 crack expands its annual net income by $590 million. Besides, a dollar per barrel shift in the sweet-sour and LLS-WTI spreads alter its yearly income by $300 million and $90 million, respectively.

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Refining margin indicators

According to Marathon Petroleum, so far in the third quarter, the blended LLS crack has fallen by $2.1 per barrel YoY to $10.6 per barrel. At the same time, RIN (Renewable Identification Numbers) expenses have declined from $4.0 per barrel in the third quarter of 2017 to $1.8 per barrel in the third quarter. The decline led to the rise in the net blended LLS crack by $0.1 per barrel to $8.8 per barrel in the third quarter.

The LLS-WTI spread has risen by $0.1 per barrel YoY in the third quarter. The sweet-sour differential has risen by $1.9 per barrel YoY to $7.3 per barrel in the third quarter.

All three of Marathon Petroleum’s refining earnings indicators have risen. These indicators show data for July and August. They will change based on the performance in September. So far, with the data available, Marathon Petroleum might witness a year-over-year rise in its refining margins and earnings in the third quarter.

Next, we’ll discuss what Andeavor’s (ANDV) refining index suggests.


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