Why Are These Four Energy Companies Surging Today?

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Phillips 66 (NYSE:PSX) is up by 4.43% after reporting third quarter earnings of $3.02 per share, beating estimates by $0.78 per share. Refining utilization increased 6 percentage points to 96% year-over-year as demand for gasoline and other refined products remained strong due to lower prices and a strong economy. Margins are healthy as Saudi Arabia continues to manipulate crude prices lower in its attempt to drive the weaker crude producers out of the market. Management is sharing the good times with shareholders, with the board recently approving an increase to its share repurchase program of $2 billion. Given Friday’s rally, shares are now up by more than 25% year-to-date. 35 funds owned stakes worth $2.8 billion in Phillips 66 at the end of the second quarter, with Warren Buffett of Berkshire Hathaway recently upping his stake to 61.5 million shares from 58 million shares.

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Marathon Petroleum Corp (NYSE:MPC) rallied by 2% after reporting third quarter earnings of $1.76 per share on revenues of $18.76 billion, missing estimates by $0.06 per share and $1.36 billion, respectively. Although the results were a bit softer than expected, Marathon Petroleum Corp’s medium-term outlook is still solid, given the ‘lower for longer’ crude prices and the strong U.S economy. The Obama administration continues to oppose WTI exports as well, helping preserve the crack spread. Also helping support shares is Marathon Petroleum’s buybacks. The company bought back $156 million in shares in the third quarter, and still has approximately $3 billion remaining in its buyback authorization.

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Disclosure: None

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