Marathon Petroleum Declares Lesser Loss than Expected

Marathon Petroleum Corp, a U.S. refiner, posted a smaller-than-expected first-quarter loss on Tuesday, owing to higher refining margins and COVID-19 vaccine rollouts, which boosted fuel demand. Over the last few months, widespread public vaccinations and the relaxation of travel restrictions have helped fuel demand rise from last year’s record lows, improving refiners’ prospects.

Marathon Petroleum, which generated positive adjusted core earnings in its refining and marketing business for the first time since the pandemic began, saw its refining and marketing margins grow over 66 percent to $10.16 per barrel from the previous quarter. In the first quarter, rivals Phillips 66 and Valero Energy saw their refining margins rise sequentially as well.

Chief Executive Officer Michael Hennigan said, “We are beginning to see increases in global mobility and demand for transportation fuels.” In the recorded quarter, however, Hennigan said that the industry was still dealing with the effects of the pandemic. The company’s crude capacity usage was 83 percent, and overall throughput (the amount of crude processed in the quarter) was 2.6 million barrels per day (bpd), up from 2.5 million bpd in the previous quarter.

Marathon expects 2.68 million bpd throughput in the second quarter. The company also announced that its board of directors had approved and made a final investment decision on the conversion of the Martinez refinery in California to a renewable diesel factory. Martinez will be one of the country’s largest clean energy facilities once completed. According to Refinitiv IBES, Marathon Petroleum, based in Findlay, Ohio, lost 20 cents per share in the quarter ended March 31, while the Street was predicting a loss of 71 cents per share.