NEW YORK, NY -- (Marketwire) -- 08/02/12 -- The Oil & Gas Refining & Marketing Industry has soared in 2012 as result of falling commodity prices. U.S. oil prices have fallen 11 percent since early April, while the S&P Oil & Gas Refining Index has soared over 35 percent, outperforming the S&P 500 Index by a large margin. "The U.S. refiners are benefiting by having the cheaper oil," says energy analyst Andy Lipow. "It all comes down to the raw material." Five Star Equities examines the outlook for companies in the Oil & Gas Refining & Marketing Industry and provides equity research on Marathon Petroleum Corp. (NYSE: MPC) and Western Refining, Inc. (NYSE: WNR).
Industry bellwether Valero Energy shares surged Tuesday after reporting earnings that topped analyst estimates. The company and other U.S. refiners have benefitted from lower U.S. oil prices compared to the benchmark Brent crude. West Texas Intermediate is currently priced $17 a barrel lower than Brent crude. Lower oil prices have allowed refiners to reduce input costs and increase their margins. "The situation for U.S. refiners is not expected to change over the next 6-12 months," stated Lipow.
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Marathon Petroleum is the nation's fifth largest transportation fuels refiner and largest in the Midwest. The company has 1,193,000 barrels-per-calendar-day capacity. Marathon reported second quarter net income of $814 million, or $2.38 per diluted share, compared with net income of $802 million, or $2.24 per diluted share, in the second quarter of 2011.
Western Refining, Inc. is an independent refining and marketing company headquartered in El Paso, Texas. Western operates refineries in El Paso, and Gallup, New Mexico. The company recently reported that its Board of Directors has authorized a share repurchase program of up to $200 million. Shares of Western Refining are up over 75 percent this year.
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