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Who among MPC, VLO, HFC, and PSX Has the Highest Refining Margin?

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Dec. 4 2020, Updated 10:52 a.m. ET

Refining margins

In this article, we’ll compare the gross refining margins of leading American downstream companies. HollyFrontier (HFC) scored the highest gross refining margin in the third quarter, followed by Marathon Petroleum (MPC), Phillips 66 (PSX), and Valero Energy (VLO).

These companies’ margins put up a mixed trend YoY (year-over-year) in the third quarter. Let’s delve deeper into individual refiners’ margin performances.

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Marathon Petroleum’s refining margin expanded

Marathon Petroleum’s gross refining and marketing margin expanded by $0.1 per barrel over the third quarter of 2017 to $14.3 per barrel in the third quarter due to a wider Western Canadian Select–WTI differential partly offset by falls in the crack spreads. The Midwest and Gulf Coast crack spreads narrowed YoY in the third quarter.

Valero’s refining margin contracted

Valero’s gross refining margin contracted from $10.9 per barrel in the third quarter of 2017 to $10.0 per barrel in the third quarter. In the third quarter, gasoline cracks declined in Valero’s operating zones, including the US West Coast, the US Midcontinent, and the North Atlantic. However, diesel cracks put up a mixed trend. Nevertheless, most oil spreads widened YoY in the third quarter.

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HollyFrontier’s refining margin expanded

HollyFrontier’s gross refining margin expanded by $5.4 per barrel YoY to $19.4 per barrel in the third quarter. HFC’s refining margin expanded across its Midcontinent, Southwest, and Rocky Mountain operating regions. The Midcontinent and Southwest regions combined accounted for 84% of HollyFrontier’s total throughput in the third quarter.

Phillips 66’s refining margin expanded

Phillips 66’s worldwide refining margin expanded $2.9 per barrel to $13.4 per barrel in the third quarter due to higher refining margins in the Central Corridor, Gulf Coast, and Atlantic/Europe regions. The Central Corridor region rose the most by $9.6 per barrel YoY to $23.6 per barrel in the third quarter.

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