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MPC, VLO, and PSX: Comparing the Refining Yields

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Feb. 27 2019, Updated 10:30 a.m. ET

Refining yields

The refining yield shows the quantity and quality of various refined products produced. In the fourth quarter, Marathon Petroleum’s (MPC) gasoline production accounted for 50% of the total refined products produced. The company’s gasoline production was higher compared to Valero Energy (VLO) and Phillips 66 (PSX). Marathon Petroleum’s distillate production was 35%. The company’s others production was only 15%—lower compared to Phillips 66.

Usually, heavier refined products get lower realizations than the lighter ones like gasoline. When more lighter products are produced, the refiners will generate higher revenues.

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Gasoline, as a percentage of the total production, was the lowest in Phillips 66. Gasoline accounted for 45% of the total refined products produced by the company in the fourth quarter. Phillips 66’s distillate production was 39% in the fourth quarter. Valero Energy’s refining operations yielded 49% gasoline and 37% distillates in the fourth quarter.

However, if we consider absolute production levels, Marathon Petroleum produced the highest gasoline volumes in the fourth quarter followed by Valero Energy and Phillips 66. The higher gasoline volumes were due to adding Andeavor’s capacity.

Total production trend

While Marathon Petroleum and Phillips 66’s total production rose year-over-year in the fourth quarter, Valero Energy’s output stayed flat. Marathon Petroleum had a higher rise compared to Phillips 66. Marathon Petroleum’s total refined products production increased 53% YoY to 3,166 Mbpd (thousand barrels per day). The higher production was due to the integration of Andeavor’s refining capacities in the fourth quarter.

Phillips 66’s output rose 2% YoY to 2,338 Mbpd in the fourth quarter. However, Valero Energy’s production was flat at 3,052 Mbpd in the fourth quarter.

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