Unconventional hydrocarbons Boost Profit for Refining Companies: Marathon Oil Corporation (MRO), Valero Energy Corporation (VLO), Murphy Oil Corporation (MUR)

Page 1 of 2

The U.S. is witnessing an oil revolution of sorts, thanks to the booming production of unconventional hydrocarbon. While producers are obvious gainers, another group benefiting immensely are refining companies. U.S. refiners benefit from North American crude, heavily boosting refining margins.

This gains being made in this industry was obvious after Valero Energy Corporation (NYSE:VLO)’s latest quarterly results when the company reported a profit of $1 billion, up from $45 million in 2011 fourth quarter profit.

Valero Energy Corporation (NYSE:VLO)Valero Energy Corporation (NYSE:VLO) said that the encouraging results were mainly due to a much-improved feedstock supply picture in the U.S.; the tight oil boom has unlocked increasing volumes of economically priced domestic crude.

The company also reported a strong top line which included revenues of $34.70 billion, just a slight gain from previous gross earnings of $34.67 billion.  The company’s numbers were well ahead of analysts’ expectations of $31.01 billion. This top line may seem stagnant to some, but cheaper domestic crude means that the company is processing more quantity now than ever.

In fact, the company said it will continue to reduce its reliance on foreign crude at its North American refineries and is expanding its capacity for West Canada heavy crude.

Higher refining output does not appear to be an issue yet as U.S. refiners have been able to export surging volumes of oil products abroad. Their competitiveness has been rising thanks to the domestic oil boom.

Although integrated oil companies stand to gain the most from the new boom – as they are the ones with access to both cheap hydrocarbon supplies and the capacity to turn them into high value petroleum products that can be shipped abroad -  refiners are making distinct niche for themselves as well.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!