A Golden Moment for Domestic Refiners
By ANDREW BARY | MORE ARTICLES BY AUTHOR
Refiners like Marathon Petroleum, HollyFrontier and Western Refining are reaping the “mid-continent advantage” as U.S. crude prices stay below world levels. A big boost to margins.
Rising oil production in the U.S. and Canada is keeping U.S. crude prices sharply below those in the world market. That has been a boon to independent oil refiners such as Marathon Petroleum (ticker: MPC), HollyFrontier (HFC) and Western Refining (WNR), which are benefiting from plentiful oil supplies in the middle of the country.
Good times for Midwestern refiners could last several years, lifting stocks like Marathon Petroleum, which was spun off from Marathon Oil (MRO) on July 1.
Patrick Semansky/Bloomberg NewsMarathon Petroleum owns six refineries. Its giant Garyville complex in Louisiana can process 464,000 barrels a day.
Marathon Petroleum shares, near 40, trade for less than seven times projected 2011 profit of $6 a share. “Marathon has top-tier refining assets and is benefiting disproportionately from the mid-continent advantage,” says Evan Calio, an energy analyst at Morgan Stanley, who began coverage after the spinoff with an Outperform rating and a $54 price target. His earnings estimate is above consensus at about $7 a share for both 2011 and 2012.
FULL FEATURE ARTICLE FROM BARRONS
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yea but the prices at the pump are going up again. but i see it like t.bone pickens does.”we get to keep our money here in the states,instead of sending it to countries that hate us”. thats a good thing.